Subrogation is a term that's understood in legal and insurance circles but rarely by the policyholders who hire them. Rather than leave it to the professionals, it would be to your advantage to know the steps of the process. The more information you have about it, the more likely it is that an insurance lawsuit will work out in your favor.
Every insurance policy you have is an assurance that, if something bad occurs, the insurer of the policy will make good in one way or another in a timely fashion. If you get hurt at work, your employer's workers compensation insurance agrees to pay 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 typically a confusing affair – and delay often compounds the damage to the victim – insurance companies usually decide to pay up front and assign blame later. They then need a means to regain the costs if, ultimately, they weren't actually responsible for the payout.
Can You Give an Example?
You are in a traffic-light accident. Another car collided with 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 to blame and his insurance policy should have paid for the repair of your car. How does your insurance company get its funds back?
How Does Subrogation Work?
This is where subrogation comes in. It is the process 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. Usually, 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.
How Does This Affect Policyholders?
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 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 choose to recoup its costs by increasing your premiums. On the other hand, if it has a capable legal team and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get half your deductible back, depending on your state laws.
In addition, 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 lawyers for car accidents Alpharetta GA, pursue subrogation and succeeds, it will recover your costs in addition to its own.
All insurers are not the same. When comparing, it's worth looking at the reputations of competing firms to determine if they pursue legitimate subrogation claims; if they resolve those claims without delay; if they keep their accountholders posted as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your funding 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 covering its income by raising your premiums, you'll feel the sting later.