What Every Insurance Policy holder Ought to Know About Subrogation

Subrogation is a term that's well-known in insurance and legal circles but sometimes not by the people who hire them. Rather than leave it to the professionals, it is to your advantage to know the steps of how it works. The more you know, the more likely it is that relevant proceedings will work out in your favor.

Any insurance policy you have is a promise that, if something bad occurs, the firm on the other end of the policy will make good in one way or another in a timely fashion. If you get hurt on the job, for example, your company's workers compensation picks up the tab 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 time spent waiting in some cases increases the damage to the policyholder – insurance companies often decide to pay up front and assign blame after the fact. They then need a path to recover the costs if, ultimately, they weren't actually responsible for the payout.

For Example

You are in a car accident. Another car crashed into yours. Police are called, you exchange insurance details, 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 his 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 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. Ordinarily, only you can sue for damages to your person or property. But under subrogation law, your insurance company 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.

How Does This Affect Individuals?

For one thing, if your insurance policy stipulated a deductible, it wasn't just your insurance company 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 insurer is timid on any subrogation case it might not win, it might opt to recover its costs by increasing your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues those cases efficiently, it is acting both in its own interests and in yours. If all 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 responsible), you'll typically get half your deductible back, based on the laws in most states.

Furthermore, if the total cost of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as personal injury lawyer Lithia Springs, GA, 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 reputations of competing companies to evaluate whether they pursue legitimate subrogation claims; if they do so without delay; if they keep their accountholders posted as the case proceeds; 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 insurer has a record of paying out claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you should keep looking.

personal injury lawyer Lithia Springs, GA

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What Every Policy holder Ought to Know About Subrogation

Subrogation is an idea that's well-known among insurance and legal firms but rarely by the people they represent. If this term has come up when dealing with your insurance agent or a legal proceeding, it is in your self-interest to comprehend the steps of the process. The more you know, the better decisions you can make with regard to your insurance company.

An insurance policy you hold is a commitment that, if something bad happens to you, the insurer of the policy will make good in a timely manner. If your vehicle is in a fender-bender, insurance adjusters (and the judicial system, when necessary) determine who was at fault and that party's insurance pays out.

But since figuring out who is financially accountable for services or repairs is typically a tedious, lengthy affair – and time spent waiting sometimes compounds the damage to the policyholder – insurance firms usually decide to pay up front and assign blame afterward. They then need a means to regain the costs if, in the end, they weren't actually in charge of the payout.

Can You Give an Example?

Your kitchen catches fire and causes $10,000 in house damages. Luckily, you have property insurance and it pays for the repairs. However, the insurance investigator discovers that an electrician had installed some faulty wiring, and there is a reasonable possibility that a judge would find him liable for the damages. The home has already been repaired in the name of expediency, but your insurance firm is out $10,000. What does the firm do next?

How Subrogation Works

This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement 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. Under ordinary circumstances, only you can sue for damages 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.

How Does This Affect the Insured?

For a start, 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 – namely, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its losses by raising your premiums. On the other hand, if it has a knowledgeable legal team and pursues them efficiently, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get $500 back, based on the laws in most states.

In addition, if the total cost of an accident is more than 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 personal injury claims Powder Springs, GA, successfully press a subrogation case, it will recover your expenses in addition to its own.

All insurance agencies are not the same. When shopping around, it's worth scrutinizing the records of competing firms to find out whether they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their accountholders informed as the case continues; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, instead, an insurer has a reputation of paying out claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.

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What Every Policy holder Ought to Know About Subrogation

Subrogation is a concept that's well-known in insurance and legal circles but sometimes not by the people they represent. Even if you've never heard the word before, it is to your advantage to comprehend the steps of the process. The more information you have, the better decisions you can make with regard to your insurance policy.

Any insurance policy you have is a commitment that, if something bad occurs, the insurer of the policy will make good in one way or another without unreasonable delay. If your vehicle is hit, insurance adjusters (and the courts, when necessary) determine who was to blame and that person's insurance covers the damages.

But since determining who is financially accountable for services or repairs is regularly a heavily involved affair – and time spent waiting in some cases adds to the damage to the policyholder – insurance firms in many cases opt to pay up front and assign blame afterward. They then need a way to recoup the costs if, in the end, they weren't in charge of the expense.

For Example

You are in a traffic-light accident. Another car crashed into 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 policy should have paid for the repair of your car. How does your company get its funds back?

How Subrogation Works

This is where subrogation comes in. It is the way that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. 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. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurance company 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 Should I Care?

For starters, if your insurance policy stipulated a deductible, it wasn't just your insurance company that had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to the tune of $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to get back its losses by upping your premiums and call it a day. On the other hand, if it has a capable legal team and goes after them aggressively, it is acting both in its own interests and in yours. If all 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 responsible), you'll typically get half your deductible back, depending on the laws in your state.

Additionally, 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 spendy. If your insurance company or its property damage lawyers, such as accident attorney Smyrna GA, successfully press a subrogation case, it will recover your expenses as well as its own.

All insurers are not the same. When comparing, it's worth looking up the records of competing firms to find out if they pursue legitimate subrogation claims; if they resolve those claims fast; if they keep their policyholders informed as the case continues; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, instead, an insurer has a record of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.

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