Subrogation is an idea that's well-known in insurance and legal circles but rarely by the policyholders who hire them. Even if you've never heard the word before, it is in your benefit to know the nuances of the process. The more information you have about it, the more likely it is that an insurance lawsuit will work out favorably.
Every insurance policy you have is an assurance that, if something bad happens to you, the firm that insures the policy will make restitutions in one way or another without unreasonable delay. If you get hurt at work, for example, your employer's workers compensation insurance agrees to pay 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 sometimes a time-consuming affair – and time spent waiting in some cases compounds the damage to the victim – insurance firms in many cases decide to pay up front and figure out the blame after the fact. They then need a means to recoup the costs if, in the end, they weren't responsible for the expense.
Can You Give an Example?
You are in a vehicle accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was entirely to blame and her 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 way that an insurance company uses to claim reimbursement when it pays out a claim that turned out not to be its responsibility. Some insurance firms 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 done to your self or property. But under subrogation law, your insurance company is considered to have some of your rights for making good on 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 one thing, 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 – namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its losses by upping your premiums. On the other hand, if it knows which cases it is owed and goes after those cases aggressively, it is doing you a favor as well as itself. 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 50 percent responsible), you'll typically get half your deductible back, based on the laws in most states.
Furthermore, 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 child custody lawyers near me Las Vegas NV, pursue subrogation and succeeds, it will recover your expenses as well as its own.
All insurers are not created equal. When comparing, it's worth looking at the records of competing agencies to determine whether they pursue winnable subrogation claims; if they resolve those claims with some expediency; if they keep their policyholders posted as the case continues; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, instead, an insurance agency has a record of honoring claims that aren't its responsibility and then protecting its income by raising your premiums, even attractive rates won't outweigh the eventual headache.