Subrogation is an idea that's well-known among legal and insurance companies but sometimes not by the people who hire them. Even if you've never heard the word before, it is to your advantage to know an overview of the process. The more information you have about it, the more likely an insurance lawsuit will work out favorably.
An insurance policy you own is a commitment that, if something bad happens to you, the firm that insures the policy will make restitutions without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and the judicial system, when necessary) decide who was to blame and that person's insurance pays out.
But since determining who is financially responsible for services or repairs is usually a confusing affair a€" and time spent waiting often compounds the damage to the policyholder a€" insurance companies often decide to pay up front and figure out the blame afterward. They then need a means to recoup the costs if, when all the facts are laid out, they weren't actually responsible for the expense.
Can You Give an Example?
You head to the doctor's office with a gouged finger. You give the receptionist your health insurance card and he writes down your coverage details. You get stitches and your insurer is billed for the expenses. But the next afternoon, when you arrive at your workplace a€" where the injury occurred a€" your boss hands you workers compensation paperwork to file. Your workers comp policy is actually responsible for the hospital trip, not your health insurance. The latter has a right to recover its money in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Usually, only you can sue for damages done to your self or property. But under subrogation law, your insurer is extended some of your rights for having taken care of the damages. It can go after the money that was originally due to you, because it has covered the amount already.
Why Does This Matter to Me?
For a start, if your insurance policy stipulated a deductible, your insurer wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well a€" to be precise, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might choose to get back its losses by increasing your premiums and call it a day. On the other hand, if it has a competent legal team and pursues those cases efficiently, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half at fault), you'll typically get half your deductible back, depending on your state laws.
Furthermore, if the total loss of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as worker compensation terms Atlanta GA, pursue subrogation and wins, it will recover your costs in addition to its own.
All insurers are not the same. When shopping around, it's worth comparing the records of competing firms to determine if they pursue valid subrogation claims; if they do so in a reasonable amount of time; if they keep their customers apprised as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your losses back and move on with your life. If, on the other hand, an insurance company has a record of honoring claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you'll feel the sting later.