What Every Policy holder Ought to Know About SubrogationSubrogation is a concept that's wellknown among insurance and legal professionals but sometimes not by the people they represent. If this term has come up when dealing with your insurance agent or a legal proceeding it would be in your selfinterest to understand the steps of how it works. The more knowledgeable you are about it the better decisions you can make with regard to your insurance policy.

Every insurance policy you have is a commitment that, if something bad happens to you, the business that covers the policy will make restitutions in one way or another without unreasonable delay. If you get injured while working, your company's workers compensation pays out for medical services. Employment lawyers handle the details; you just get fixed up.

But since determining who is financially responsible for services or repairs is often a time-consuming affair – and delay in some cases increases the damage to the policyholder – insurance firms in many cases opt to pay up front and figure out the blame afterward. They then need a mechanism to recoup the costs if, when all the facts are laid out, they weren't responsible for the expense.

For Example

You are in a vehicle accident. Another car ran into yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later police tell the insurance companies that the other driver was entirely at fault and his insurance should have paid for the repair of your car. How does your insurance company get its money back?

How Does Subrogation Work?

This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement 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. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurance company 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 a start, if your insurance policy stipulated a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its expenses by boosting your premiums. On the other hand, if it has a capable legal team and pursues them enthusiastically, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full 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 your state laws.

Additionally, if the total expense of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as criminal law defense attorney Hillsboro OR, successfully press a subrogation case, it will recover your expenses as well as its own.

All insurers are not created equal. When comparing, it's worth measuring the records of competing companies to evaluate whether they pursue valid subrogation claims; if they resolve those claims with some expediency; if they keep their customers advised as the case continues; 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 honoring claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you'll feel the sting later.

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