Subrogation and How It Affects Your Insurance Policy <br/> <br/>

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

An insurance policy you own is an assurance that, if something bad occurs, the business that covers the policy will make good in a timely fashion. If you get hurt while working, your employer's workers compensation agrees to pay 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 usually a heavily involved affair – and delay in some cases compounds the damage to the victim – insurance firms usually opt to pay up front and figure out the blame after the fact. They then need a way to recoup the costs if, ultimately, they weren't responsible for the expense.

Let's Look at an Example

You are in a highway accident. Another car ran into yours. The police show up to assess the situation, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was at fault and her insurance policy should have paid for the repair of your vehicle. How does your insurance company get its money back?

How Does Subrogation Work?

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. Usually, 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 for making good on 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 starters, if you have 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 insurance company is lax about bringing subrogation cases to court, it might choose to recoup its losses by raising 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 $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, based on the laws in most states.

Moreover, if the total expense 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 marietta personal injury attorney, pursue subrogation and succeeds, it will recover your costs as well as its own.

All insurers are not the same. When comparing, it's worth scrutinizing the records of competing firms to evaluate if they pursue winnable subrogation claims; if they do so quickly; if they keep their customers 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, on the other hand, an insurance company has a reputation of paying out claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you'll feel the sting later.