Subrogation is a term that's well-known in legal and insurance circles but sometimes not by the customers who employ them. If this term has come up when dealing with your insurance agent or a legal proceeding, it would be to your advantage to comprehend an overview of how it works. The more knowledgeable you are, the more likely it is that an insurance lawsuit will work out favorably.
Every insurance policy you hold is a promise that, if something bad occurs, the business that covers the policy will make good in one way or another without unreasonable delay. If a windstorm damages your home, for instance, your property insurance agrees to remunerate you or enable the repairs, subject to state property damage laws.
But since determining who is financially accountable for services or repairs is usually a confusing affair – and delay often compounds the damage to the policyholder – insurance firms often opt to pay up front and figure out the blame later. They then need a method to get back the costs if, when all is said and done, 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 health insurance card and he writes down your coverage information. You get stitched up and your insurer gets a bill for the medical care. But the next morning, when you arrive at your workplace – where the accident happened – your boss hands you workers compensation paperwork to fill out. Your employer's workers comp policy is actually responsible for the invoice, not your health insurance. The latter has an interest in recovering its money in some way.
How Does Subrogation Work?
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 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 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 Do I Need to Know This?
For starters, if you have a deductible, it wasn't just your insurer 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 timid on any subrogation case it might not win, it might opt to recover its costs by raising your premiums. On the other hand, if it has a knowledgeable legal team and pursues those cases aggressively, it is acting both in its own interests and in yours. 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 to blame), you'll typically get $500 back, depending on your state laws.
Moreover, if the total price of an accident is more than 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 Personal injury attorney Lithia Springs, GA, successfully press a subrogation case, it will recover your losses as well as its own.
All insurers are not created equal. When shopping around, it's worth scrutinizing the reputations of competing agencies to find out if they pursue legitimate subrogation claims; if they do so without dragging their feet; if they keep their policyholders updated 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, on the other hand, an insurer has a reputation of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, even attractive rates won't outweigh the eventual headache.Personal injury attorney Lithia Springs, GA