Subrogation and How It Affects Policyholders <br/> <br/>

Subrogation is a concept that's understood in legal and insurance circles but often not by the customers who employ them. Even if you've never heard the word before, it is in your self-interest to know the steps of how it works. The more knowledgeable you are, the more likely relevant proceedings will work out in your favor.

Any insurance policy you hold is a commitment that, if something bad occurs, the insurer of the policy will make good in a timely fashion. If you get hurt while working, 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 typically a confusing affair – and delay in some cases increases the damage to the policyholder – insurance firms in many cases decide to pay up front and assign blame after the fact. They then need a way to recoup the costs if, when there is time to look at all the facts, they weren't responsible for the expense.

Let's Look at an Example

You arrive at the hospital with a gouged finger. You give the nurse your medical insurance card and she takes down your policy details. You get stitches and your insurer gets a bill for the tab. But on the following day, when you clock in at your place of employment – where the accident happened – you are given workers compensation paperwork to file. Your company's workers comp policy is actually responsible for the invoice, not your medical insurance policy. 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 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 companies 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 insurer is given some of your rights in exchange for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.

Why Does This Matter to Me?

For one thing, 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 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 recoup its costs by boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues them enthusiastically, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get half your deductible back, based on the laws in most states.

Additionally, 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 marietta personal injury attorney, 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 looking up the reputations of competing firms to find out whether they pursue legitimate subrogation claims; if they do so quickly; if they keep their clients posted as the case continues; and if they then process successfully won reimbursements quickly so that you can get your funding back and move on with your life. If, instead, an insurance firm has a reputation of honoring claims that aren't its responsibility and then covering its profitability by raising your premiums, you'll feel the sting later.