What Every Policy holder Ought to Know About Subrogation

Subrogation is an idea that's understood among legal and insurance professionals but sometimes not by the policyholders who hire them. Rather than leave it to the professionals, it would be to your advantage to comprehend an overview of how it works. The more knowledgeable you are about it, the better decisions you can make about your insurance company.

Any insurance policy you own is a commitment that, if something bad occurs, the business that insures the policy will make restitutions without unreasonable delay. If you get injured while you're on the clock, for instance, your company's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.

But since determining who is financially accountable for services or repairs is often a tedious, lengthy affair – and delay often increases the damage to the victim – insurance firms usually decide to pay up front and assign blame later. They then need a method to recover the costs if, ultimately, they weren't responsible for the expense.

Can You Give an Example?

Your bedroom catches fire and causes $10,000 in home damages. Fortunately, you have property insurance and it pays out your claim in full. However, the assessor assigned to your case discovers that an electrician had installed some faulty wiring, and there is a reasonable possibility that a judge would find him responsible for the damages. The house has already been repaired in the name of expediency, but your insurance company is out $10,000. What does the company do next?

How Does Subrogation Work?

This is where subrogation comes in. It is the method that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. Some insurance firms 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 person or property. But under subrogation law, your insurer is given some of your rights for making good on the damages. It can go after the money that was originally due to you, because it has covered the amount already.

Why Do I Need to Know This?

For starters, if your insurance policy stipulated a deductible, it wasn't just your insurer who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to the tune of $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to get back its losses by boosting your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and goes after them efficiently, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get $500 back, based on the laws in most states.

Moreover, if the total expense of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as family law lawyer Olympia, WA, successfully press a subrogation case, it will recover your costs in addition to its own.

All insurers are not created equal. When comparing, it's worth researching the reputations of competing firms to find out if they pursue winnable subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their clients updated as the case continues; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, on the other hand, an insurance firm has a record of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.