Subrogation is an idea that's well-known among legal and insurance companies but sometimes not by the people who hire them. Even if you've never heard the word before, it would be to your advantage to understand the steps of the process. The more you know about it, the more likely an insurance lawsuit will work out favorably.
An insurance policy you hold is a commitment that, if something bad occurs, the firm that covers the policy will make good in a timely manner. If you get hurt while you're on the clock, your employer's workers compensation insurance picks up the tab 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 regularly a confusing affair – and time spent waiting often adds to the damage to the policyholder – insurance firms often opt to pay up front and figure out the blame afterward. They then need a path to recover the costs if, when there is time to look at all the facts, they weren't actually responsible for the expense.
Can You Give an Example?
You go to the hospital with a deeply cut finger. You hand the nurse your health insurance card and she records your plan details. You get stitched up and your insurer gets an invoice for the medical care. But on the following morning, when you arrive at your place of employment – where the accident occurred – your boss hands you workers compensation forms to fill out. Your workers comp policy is in fact responsible for the payout, 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 companies 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 done to your self or property. But under subrogation law, your insurer is considered to have some of your rights in exchange 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 Does This Matter to Me?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurer who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to the tune of $1,000. If your insurance company is timid on any subrogation case it might not win, it might choose to get back its costs by increasing your premiums. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all $10,000 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 accountable), you'll typically get half your deductible back, based on the laws in most states.
Furthermore, if the total cost 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 lawyer 99501, pursue subrogation and succeeds, it will recover your losses as well as its own.
All insurance companies are not created equal. When comparing, it's worth looking at the records of competing companies to evaluate whether they pursue winnable subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their account holders updated as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your money back and move on with your life. If, on the other hand, an insurance company has a reputation of paying out claims that aren't its responsibility and then protecting its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.