Subrogation is a term that's well-known in legal and insurance circles but often not by the customers they represent. Rather than leave it to the professionals, it is in your benefit to know the nuances of the process. The more knowledgeable you are about it, the more likely relevant proceedings will work out in your favor.
Every insurance policy you own is a promise that, if something bad occurs, the insurer of the policy will make good in a timely fashion. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) determine who was at fault and that person's insurance covers the damages.
But since ascertaining who is financially responsible for services or repairs is sometimes a heavily involved affair – and delay in some cases increases the damage to the victim – insurance companies often opt to pay up front and figure out the blame after the fact. They then need a method to get back the costs if, once the situation is fully assessed, they weren't in charge of the payout.
Can You Give an Example?
You rush into the doctor's office with a gouged finger. You give the nurse your health insurance card and he writes down your plan information. You get stitched up and your insurer gets a bill for the tab. But on the following day, when you arrive at your place of employment – where the accident occurred – your boss hands you workers compensation forms to turn in. Your workers comp policy is in fact responsible for the costs, 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 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 insurance firms 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 insurer is given some of your rights for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Should I Care?
For starters, 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 – to the tune of $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its expenses by upping your premiums. On the other hand, if it has a capable legal team and goes after those cases aggressively, 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 one-half at fault), you'll typically get half your deductible back, based on the laws in most states.
Moreover, 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 lawyers near me Vancouver WA, pursue subrogation and wins, it will recover your costs as well as its own.
All insurers are not created equal. When comparing, it's worth weighing the records of competing agencies to evaluate whether they pursue winnable subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their clients posted as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your money 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 covering its income by raising your premiums, even attractive rates won't outweigh the eventual headache.