The Things You Need to Know About Subrogation
- 2 29, 2016
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Subrogation is an idea that's well-known among insurance and legal firms but rarely by the people who employ them. Even if it sounds complicated, it is in your benefit to comprehend an overview of the process. The more information you have, the more likely it is that relevant proceedings will work out in your favor.
Any insurance policy you hold is a commitment that, if something bad occurs, the insurer of the policy will make restitutions without unreasonable delay. If you get hurt while working, your company's workers compensation insurance pays out 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 often a heavily involved affair – and time spent waiting in some cases adds to the damage to the policyholder – insurance firms usually opt to pay up front and figure out the blame later. They then need a way to get back the costs if, in the end, they weren't responsible for the payout.
Let's Look at an Example
You head to the emergency room with a gouged finger. You give the nurse your medical insurance card and she records your policy information. You get stitched up and your insurer is billed for the services. But the next day, when you arrive at your place of employment – where the injury happened – you are given workers compensation paperwork to turn in. Your employer's workers comp policy is in fact responsible for the invoice, not your medical insurance. The latter has an interest in recovering its costs somehow.
How Subrogation Works
This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some companies 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 self or property. But under subrogation law, your insurer 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 Do I Need to Know This?
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 – namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its losses by increasing your premiums and call it a day. On the other hand, if it has a competent legal team and goes after them efficiently, 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 price 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 lawsuit lawyer springville ut, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance companies are not the same. When comparing, it's worth researching the records of competing companies to determine if they pursue winnable subrogation claims; if they do so without dragging their feet; 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 losses back and move on with your life. If, on the other hand, an insurer has a reputation of paying out claims that aren't its responsibility and then covering its income by raising your premiums, you should keep looking.