Subrogation is a concept that's well-known among insurance and legal firms but often not by the people who employ them. Even if you've never heard the word before, it is in your self-interest to understand the steps of how it works. The more knowledgeable you are about it, the more likely relevant proceedings will work out in your favor.
Every insurance policy you have is an assurance that, if something bad happens to you, the business that covers the policy will make good in a timely manner. If your vehicle is hit, insurance adjusters (and the courts, when necessary) determine who was to blame and that person's insurance pays out.
But since figuring out who is financially accountable for services or repairs is usually a time-consuming affair – and time spent waiting in some cases compounds the damage to the victim – insurance firms often decide to pay up front and figure out the blame afterward. They then need a path to get back the costs if, once the situation is fully assessed, they weren't in charge of the expense.
You are in an auto accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance information, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later police tell the insurance companies that the other driver was entirely to blame and her insurance should have paid for the repair of your car. How does your company get its money back?
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. Some companies 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 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 that was originally due to you, because it has covered the amount already.
Why Should I Care?
For a start, if you have a deductible, it wasn't just your insurer that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to recover its costs by ballooning your premiums. On the other hand, if it has a proficient legal team and goes after them enthusiastically, it is doing you a favor as well as itself. 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 50 percent to blame), you'll typically get half your deductible back, depending on your state laws.
Moreover, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely expensive. If your insurance company or its property damage lawyers, such as lawyers for car accidents Canton, ga, pursue subrogation and wins, it will recover your expenses in addition to its own.
All insurance companies are not created equal. When shopping around, it's worth scrutinizing the reputations of competing companies to determine if they pursue valid subrogation claims; if they do so with some expediency; if they keep their accountholders updated as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, instead, an insurance firm has a record of paying out claims that aren't its responsibility and then safeguarding its profit margin by raising your premiums, you'll feel the sting later.