- 8 29, 2019
- |Personal Injury Attorney
- No Comments
Subrogation is a concept that's understood in legal and insurance circles but sometimes not by the policyholders they represent. Even if it sounds complicated, it is to your advantage to know the nuances of the process. The more information you have about it, the more likely relevant proceedings will work out favorably.
An insurance policy you own is a promise that, if something bad happens to you, the company on the other end of the policy will make good in a timely manner. If your vehicle is hit, insurance adjusters (and police, when necessary) determine who was to blame and that party's insurance pays out.
But since ascertaining who is financially accountable for services or repairs is sometimes a heavily involved affair – and delay in some cases adds to the damage to the policyholder – insurance companies in many cases decide to pay up front and figure out the blame after the fact. They then need a way to recoup the costs if, when all the facts are laid out, they weren't actually in charge of the payout.
Can You Give an Example?
You head to the hospital with a sliced-open finger. You hand the nurse your medical insurance card and she writes down your policy information. You get stitched up and your insurance company is billed for the medical care. But on the following afternoon, when you get to your place of employment – where the injury occurred – your boss hands you workers compensation forms to turn in. Your company's workers comp policy is in fact responsible for the costs, not your medical insurance. It has a vested interest in getting that money back in some way.
How Subrogation Works
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. Under ordinary circumstances, only you can sue for damages to your person or property. But under subrogation law, your insurance company is given 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.
How Does This Affect Me?
For one thing, if your insurance policy stipulated a deductible, it wasn't just your insurance company 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 lax about bringing subrogation cases to court, it might opt to get back its costs by raising your premiums. On the other hand, if it has a proficient 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, based on the laws in most states.
Additionally, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely expensive. If your insurance company or its property damage lawyers, such as auto accident injury attorney Middle River MD, successfully press a subrogation case, it will recover your costs as well as its own.
All insurance agencies are not created equal. When comparing, it's worth scrutinizing the records of competing agencies to evaluate whether they pursue legitimate subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their accountholders advised as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your money 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.