Subrogation is an idea that's well-known in insurance and legal circles but rarely by the customers who hire them. Even if you've never heard the word before, it is to your advantage to understand the nuances of the process. The more knowledgeable you are about it, the more likely it is that relevant proceedings will work out favorably.
Every insurance policy you own is a commitment 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 at work, for example, your company's workers compensation insurance pays out 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 regularly a tedious, lengthy affair – and delay sometimes increases the damage to the policyholder – insurance firms usually opt to pay up front and assign blame after the fact. They then need a means to get back the costs if, once the situation is fully assessed, they weren't actually in charge of the payout.
Can You Give an Example?
You are in a traffic-light accident. Another car ran into yours. Police are called, 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 at fault and her insurance should have paid for the repair of your car. How does your insurance company get its money back?
How Does Subrogation Work?
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 self or property. But under subrogation law, your insurance company is given some of your rights for making good on 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 a start, if you have a deductible, your insurance company 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 – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its expenses by raising your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues them aggressively, it is doing you a favor as well as itself. 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 accountable), you'll typically get half your deductible back, depending on the laws in your state.
In addition, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as workers compensation Milton, ga, successfully press a subrogation case, it will recover your costs as well as its own.
All insurers are not created equal. When shopping around, it's worth scrutinizing the records of competing firms to determine whether they pursue legitimate subrogation claims; if they do so quickly; if they keep their clients informed as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, instead, an insurance company has a reputation of paying out claims that aren't its responsibility and then protecting its income by raising your premiums, even attractive rates won't outweigh the eventual headache.