Subrogation is a concept that's well-known among legal and insurance firms but rarely by the customers who employ them. Rather than leave it to the professionals, it would be in your self-interest to comprehend the nuances of the process. The more you know, the more likely it is that an insurance lawsuit will work out favorably.
Any insurance policy you hold is a promise that, if something bad occurs, the company that insures the policy will make restitutions in one way or another in a timely manner. If your vehicle is in a fender-bender, insurance adjusters (and the judicial system, when necessary) decide who was at fault and that person's insurance pays out.
But since determining who is financially responsible for services or repairs is often a confusing affair – and time spent waiting often adds to the damage to the victim – insurance companies often decide to pay up front and assign blame after the fact. They then need a mechanism to regain the costs if, when all is said and done, they weren't actually responsible for the payout.
Let's Look at an Example
You rush into the hospital with a sliced-open finger. You hand the nurse your health insurance card and he records your plan details. You get taken care of and your insurer gets a bill for the medical care. But on the following afternoon, when you get to your workplace – where the accident occurred – you are given workers compensation paperwork to fill out. Your employer's workers comp policy is in fact responsible for the payout, not your health insurance. The latter has a right to recover 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 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 to your person 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.
How Does This Affect Me?
For one thing, if your insurance policy stipulated 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 – namely, $1,000. If your insurer is timid on any subrogation case it might not win, it might opt to recover its losses by upping your premiums. On the other hand, if it has a proficient legal team and goes after them efficiently, 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 to blame), you'll typically get half your deductible back, depending on the laws in your state.
In addition, if the total expense 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 family law attorney 23294, successfully press a subrogation case, it will recover your losses as well as its own.
All insurers are not created equal. When comparing, it's worth weighing the records of competing companies to find out whether they pursue legitimate subrogation claims; if they resolve those claims without dragging their feet; if they keep their accountholders apprised as the case goes on; and if they then process successfully won reimbursements immediately 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 covering its bottom line by raising your premiums, you'll feel the sting later.