Subrogation is an idea that's well-known in legal and insurance circles but often not by the customers they represent. Rather than leave it to the professionals, it would be to your advantage to know the steps of the process. The more you know about it, the more likely relevant proceedings will work out in your favor.
An insurance policy you hold is an assurance that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another without unreasonable delay. If your property burns down, for example, your property insurance steps in to pay you or facilitate the repairs, subject to state property damage laws.
But since figuring out who is financially responsible for services or repairs is sometimes a tedious, lengthy affair – and delay often increases the damage to the victim – insurance firms usually opt to pay up front and figure out the blame later. They then need a path to regain the costs if, ultimately, they weren't actually responsible for the payout.
Can You Give an Example?
You rush into the emergency room with a sliced-open finger. You give the receptionist your health insurance card and she writes down your plan details. You get stitches and your insurer gets an invoice for the tab. But on the following afternoon, when you get to your workplace – where the injury happened – you are given workers compensation paperwork to turn in. Your company's workers comp policy is in fact responsible for the expenses, not your health insurance policy. It has a vested interest in getting that money back in some way.
How Subrogation Works
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. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurer is extended 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 Does This Matter to Me?
For one thing, if you have a deductible, your insurer 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 the tune of $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its costs by upping your premiums. On the other hand, if it has a knowledgeable legal team and goes after those cases enthusiastically, it is doing you a favor as well as itself. If all ten grand is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half culpable), you'll typically get $500 back, depending on the laws in your state.
Furthermore, if the total cost of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely spendy. If your insurance company or its property damage lawyers, such as car accident lawyer SMYRNA, Ga, successfully press a subrogation case, it will recover your costs in addition to its own.
All insurers are not the same. When shopping around, it's worth contrasting the records of competing agencies to find out whether they pursue valid subrogation claims; if they do so fast; if they keep their clients apprised as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your deductible 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 safeguarding its profitability by raising your premiums, you'll feel the sting later.