Subrogation is a term that's understood among legal and insurance firms but sometimes not by the people they represent. Rather than leave it to the professionals, it would be in your benefit to know the nuances of the process. The more you know about it, the more likely it is that an insurance lawsuit will work out in your favor.
Every insurance policy you hold is an assurance that, if something bad happens to you, the company that covers the policy will make restitutions without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and the courts, when necessary) decide who was at fault and that person's insurance covers the damages.
But since ascertaining who is financially responsible for services or repairs is often a time-consuming affair – and delay sometimes compounds the damage to the victim – insurance firms usually opt to pay up front and assign blame later. They then need a means to recover the costs if, ultimately, they weren't actually responsible for the payout.
Let's Look at an Example
You are in a highway accident. Another car collided with yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance and file a repair claim. Later police tell the insurance companies that the other driver was at fault and his insurance should have paid for the repair of your car. How does your insurance company get its money back?
How Does Subrogation Work?
This is where subrogation comes in. It is the way 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. Under ordinary circumstances, only you can sue for damages to your person or property. But under subrogation law, your insurance company is considered to have some of your rights in exchange 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 Should I Care?
For starters, if you have a deductible, it wasn't just your insurance company that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might choose to recover its costs by increasing your premiums. On the other hand, if it knows which cases it is owed 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 responsible), you'll typically get half your deductible back, based on the laws in most states.
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 Norcross personal injury attorney, pursue subrogation and succeeds, it will recover your losses as well as its own.
All insurance agencies are not created equal. When comparing, it's worth measuring the reputations of competing agencies to find out if they pursue winnable subrogation claims; if they do so without delay; if they keep their accountholders updated as the case continues; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, on the other hand, an insurance company has a reputation of paying out claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you'll feel the sting later.