Subrogation is a term that's understood in legal and insurance circles but rarely by the people who employ them. Even if it sounds complicated, it would be to your advantage to know the steps of how it works. The more you know, the more likely it is that an insurance lawsuit will work out in your favor.
Any insurance policy you own is an assurance that, if something bad happens to you, the business that covers 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) decide who was at fault and that party's insurance pays out.
But since figuring out who is financially responsible for services or repairs is regularly a heavily involved affair – and time spent waiting sometimes compounds the damage to the policyholder – insurance companies often decide to pay up front and assign blame afterward. They then need a method to recoup the costs if, in the end, they weren't responsible for the payout.
Can You Give an Example?
You arrive at the emergency room with a deeply cut finger. You give the receptionist your health insurance card and she writes down your coverage details. You get taken care of and your insurer gets an invoice for the tab. But on the following afternoon, when you get to your workplace – where the accident happened – your boss hands you workers compensation forms to fill out. Your employer's workers comp policy is in fact responsible for the expenses, not your health insurance policy. The latter has a right to recover its costs in some way.
How Subrogation Works
This is where subrogation comes in. It is the process 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. Normally, only you can sue for damages to your self or property. But under subrogation law, your insurer is extended 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 one thing, if your insurance policy stipulated a deductible, it wasn't just your insurer 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 unconcerned with pursuing subrogation even when it is entitled, it might choose to get back its expenses by raising your premiums and call it a day. On the other hand, if it has a capable legal team and pursues them efficiently, it is acting both in its own interests and in yours. If all of the money 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 at fault), you'll typically get half your deductible back, depending on your state laws.
Additionally, if the total price 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 civil rights attorney near me University Place WA, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurers are not created equal. When shopping around, it's worth looking at the reputations of competing agencies to determine whether they pursue legitimate subrogation claims; if they do so with some expediency; if they keep their account holders informed as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your losses back and move on with your life. If, on the other hand, an insurer has a reputation of honoring claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.