Subrogation is a term that's well-known among insurance and legal professionals but sometimes not by the customers who employ them. Rather than leave it to the professionals, it is in your self-interest to know an overview of the process. The more information you have about it, the better decisions you can make with regard to your insurance policy.
Any insurance policy you hold is a promise that, if something bad occurs, the company on the other end of the policy will make good without unreasonable delay. If you get hurt while you're on the clock, your company's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially accountable for services or repairs is typically a time-consuming affair – and delay in some cases adds to the damage to the policyholder – insurance firms in many cases decide to pay up front and figure out the blame later. They then need a path to regain the costs if, when all the facts are laid out, they weren't responsible for the payout.
You rush into the doctor's office with a deeply cut finger. You hand the receptionist your medical insurance card and she writes down your plan information. You get stitches and your insurance company gets an invoice for the expenses. But on the following morning, when you clock in at work – where the injury happened – you are given workers compensation forms to file. Your workers comp policy is actually responsible for the invoice, not your medical insurance policy. The latter has an interest in recovering its costs somehow.
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 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 person or property. But under subrogation law, your insurance company is extended some of your rights for having taken care of 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 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 lost some money too – to be precise, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to recoup its expenses by raising your premiums. On the other hand, if it knows which cases it is owed and pursues them enthusiastically, it is acting both in its own interests and in yours. If all is recovered, you will get your full 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, depending on the laws in your state.
Furthermore, if the total loss 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 family law lawyer 23294, successfully press a subrogation case, it will recover your costs as well as its own.
All insurance agencies are not the same. When shopping around, it's worth looking up the reputations of competing firms to determine if they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their clients informed as the case goes on; and if they then process successfully won reimbursements right away so that you can get your losses 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 protecting its bottom line by raising your premiums, you'll feel the sting later.