Subrogation is an idea that's understood among insurance and legal companies but often not by the policyholders who hire them. Even if you've never heard the word before, it is in your self-interest to know the nuances of how it works. The more knowledgeable you are about it, the more likely relevant proceedings will work out favorably.
Any insurance policy you own is a commitment that, if something bad happens to you, the insurer of the policy will make good in a timely fashion. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) determine who was to blame and that party's insurance pays out.
But since figuring out who is financially responsible for services or repairs is usually a time-consuming affair – and time spent waiting sometimes increases the damage to the policyholder – insurance companies in many cases decide to pay up front and figure out the blame afterward. They then need a mechanism to regain the costs if, when all is said and done, they weren't actually responsible for the expense.
You arrive at the doctor's office with a deeply cut finger. You give the receptionist your medical insurance card and he takes down your policy information. You get stitches and your insurer is billed for the tab. But the next afternoon, when you clock in at your place of employment – where the injury occurred – you are given workers compensation paperwork to fill out. Your company's workers comp policy is in fact responsible for the expenses, not your medical insurance policy. The latter has an interest in recovering its costs in some way.
How Subrogation Works
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 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 to your self or property. But under subrogation law, your insurer is considered to have 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 Does This Matter to Me?
For a start, if you have a deductible, your insurer wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – namely, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its expenses by ballooning your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues those cases aggressively, it is doing you a favor as well as itself. If all of the money 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 at fault), you'll typically get half your deductible back, based on the laws in most states.
Moreover, if the total cost 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 immigration lawyer near me Sandy Ut, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurance companies are not created equal. When shopping around, it's worth measuring the records of competing companies to evaluate whether they pursue legitimate subrogation claims; if they do so fast; if they keep their account holders posted as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your money 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 covering its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.