Subrogation is an idea that's understood in legal and insurance circles but often not by the customers they represent. Rather than leave it to the professionals, it would be in your benefit to know the steps of the process. The more information you have about it, the better decisions you can make about your insurance policy.

Any insurance policy you own is a commitment that, if something bad happens to you, the business on the other end of the policy will make restitutions without unreasonable delay. If you get an injury while you're on the clock, your employer's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.

But since ascertaining who is financially accountable for services or repairs is sometimes a confusing affair – and time spent waiting often compounds the damage to the victim – insurance firms often opt to pay up front and assign blame afterward. They then need a means to regain the costs if, once the situation is fully assessed, they weren't responsible for the payout.

For Example

You are in an auto accident. Another car ran into yours. Police are called, you exchange insurance information, 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 to blame and his insurance should have paid for the repair of your vehicle. How does your insurance company get its funds back?

How Subrogation Works

This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement 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 done to your self or property. But under subrogation law, your insurance company is extended some of your rights in exchange for having taken care of 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 Me?

For a start, if your insurance policy stipulated a deductible, your insurance company wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its costs by raising your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after them enthusiastically, it is doing you a favor as well as itself. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get $500 back, based on the laws in most states.

In addition, if the total expense of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as Personal injury attorney near me Tacoma WA, pursue subrogation and wins, it will recover your costs in addition to its own.

All insurers are not created equal. When comparing, it's worth scrutinizing the records of competing companies to determine if they pursue legitimate subrogation claims; if they do so without dragging their feet; if they keep their accountholders apprised as the case continues; and if they then process successfully won reimbursements immediately so that you can get your losses back and move on with your life. If, on the other hand, an insurer has a record of paying out claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you'll feel the sting later.