The Things Every Policy holder Ought to Know About Subrogation

Subrogation is a term that's well-known in legal and insurance circles but rarely by the policyholders they represent. Even if you've never heard the word before, it would be in your self-interest to understand the steps of the process. The more information you have about it, the more likely relevant proceedings will work out favorably.

An insurance policy you have is a promise that, if something bad occurs, the company that insures the policy will make restitutions in a timely manner. If you get an injury while you're on the clock, for example, your company's workers compensation pays out for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially accountable for services or repairs is regularly a tedious, lengthy affair – and delay often compounds the damage to the victim – insurance firms usually decide to pay up front and figure out the blame later. They then need a means to get back the costs if, ultimately, they weren't actually in charge of the expense.

Let's Look at an Example

You head to the doctor's office with a deeply cut finger. You hand the receptionist your health insurance card and he takes down your plan information. You get taken care of and your insurer gets an invoice for the services. But the next morning, when you get to work – where the accident happened – you are given workers compensation forms to file. Your workers comp policy is actually responsible for the payout, not your health insurance policy. It has a vested interest in getting that money back somehow.

How Subrogation Works

This is where subrogation comes in. It is the process that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. 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 person or property. But under subrogation law, your insurer is extended some of your rights in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.

How Does This Affect Individuals?

For a start, if you have 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 get back its losses by increasing your premiums and call it a day. On the other hand, if it has a capable legal team and goes after them enthusiastically, it is doing you a favor as well as itself. 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 50 percent culpable), you'll typically get half your deductible back, based on the laws in most states.

In addition, if the total loss 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 criminal defense attorney services Vancouver WA, pursue subrogation and wins, it will recover your expenses in addition to its own.

All insurance agencies are not the same. When shopping around, it's worth weighing the reputations of competing firms to evaluate whether they pursue valid subrogation claims; if they do so with some expediency; if they keep their clients apprised as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your funding 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 income by raising your premiums, you'll feel the sting later.