Subrogation is a concept that's understood in insurance and legal circles but often not by the customers they represent. Even if you've never heard the word before, it would be in your self-interest to comprehend an overview of the process. The more you know, the more likely it is that an insurance lawsuit will work out in your favor.
Every insurance policy you have is an assurance that, if something bad happens to you, the insurer of the policy will make good in one way or another without unreasonable delay. If you get hurt on the job, for instance, your employer's workers compensation agrees to pay 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 usually a heavily involved affair – and delay sometimes adds to the damage to the victim – insurance companies usually decide to pay up front and assign blame afterward. They then need a mechanism to recoup the costs if, when there is time to look at all the facts, they weren't actually in charge of the payout.
Let's Look at an Example
You rush into the doctor's office with a deeply cut finger. You hand the receptionist your health insurance card and she writes down your policy details. You get taken care of and your insurance company gets an invoice for the medical care. But on the following day, when you clock in at work – where the injury occurred – your boss hands you workers compensation paperwork to fill out. Your company's workers comp policy is in fact responsible for the bill, not your health insurance company. It has a vested interest in getting that money back 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 insurance firms have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is given some of your rights for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
How Does This Affect Individuals?
For one thing, if your insurance policy stipulated a deductible, your insurance company wasn't the only one 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 lax about bringing subrogation cases to court, it might opt to recoup its losses by raising your premiums. On the other hand, if it has a knowledgeable legal team and goes after them aggressively, it is acting both in its own interests and in yours. If all $10,000 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 culpable), you'll typically get $500 back, depending on your state laws.
Furthermore, 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 Personal injury attorney marietta, pursue subrogation and wins, it will recover your losses as well as its own.
All insurers are not the same. When comparing, it's worth researching the reputations of competing companies to determine whether they pursue winnable subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their clients informed 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, instead, an insurer has a record of honoring claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you'll feel the sting later.