Subrogation is an idea that's well-known among legal and insurance professionals but often not by the customers who employ them. Rather than leave it to the professionals, it is in your self-interest to comprehend an overview of the process. The more knowledgeable you are about it, the more likely it is that an insurance lawsuit will work out in your favor.

Any insurance policy you own is a promise that, if something bad occurs, the firm on the other end of the policy will make good without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) decide who was at fault and that party's insurance pays out.

But since determining who is financially accountable for services or repairs is often a tedious, lengthy affair – and delay in some cases adds to the damage to the policyholder – insurance companies in many cases decide to pay up front and figure out the blame afterward. They then need a means to recoup the costs if, when all is said and done, they weren't actually responsible for the payout.

Can You Give an Example?

Your kitchen catches fire and causes $10,000 in house damages. Fortunately, you have property insurance and it takes care of the repair expenses. However, the assessor assigned to your case finds out that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him liable for the loss. You already have your money, but your insurance firm is out all that money. What does the firm do next?

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. Ordinarily, only you can sue for damages to your self or property. But under subrogation law, your insurance company is given some of your rights in exchange 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.

Why Does This Matter to Me?

For a start, 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 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 increasing your premiums. On the other hand, if it has a competent legal team and goes after them enthusiastically, it is acting both in its own interests and in yours. If all 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 responsible), you'll typically get half your deductible back, depending on the laws in your state.

Additionally, if the total loss 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 best family law lawyer Las Vegas NV, pursue subrogation and succeeds, it will recover your expenses as well as its own.

All insurance companies are not the same. When comparing, it's worth looking up the reputations of competing agencies to evaluate if they pursue winnable subrogation claims; if they resolve those claims quickly; if they keep their policyholders updated as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your money back and move on with your life. If, instead, an insurer has a record 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.