Subrogation is an idea that's well-known among insurance and legal professionals but sometimes not by the people who employ them. Rather than leave it to the professionals, it would be in your self-interest to comprehend an overview of how it works. The more knowledgeable you are about it, the more likely it is that relevant proceedings will work out favorably.
Any insurance policy you have is a commitment that, if something bad happens to you, the business on the other end of the policy will make good in one way or another without unreasonable delay. If your vehicle is hit, insurance adjusters (and police, when necessary) decide who was at fault and that person's insurance pays out.
But since figuring out who is financially responsible for services or repairs is often a confusing affair – and time spent waiting sometimes compounds the damage to the victim – insurance companies usually opt to pay up front and assign blame later. They then need a way to recover the costs if, ultimately, they weren't in charge of the expense.
Can You Give an Example?
You are in a traffic-light accident. Another car ran into yours. Police are called, 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 at fault and her insurance policy should have paid for the repair of your vehicle. How does your company get its funds back?
How Subrogation Works
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. Under ordinary circumstances, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is given some of your rights in exchange for having taken care of 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 the Insured?
For one thing, if your insurance policy stipulated a deductible, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its costs by increasing your premiums and call it a day. On the other hand, if it has a proficient legal team and goes after them enthusiastically, it is acting both in its own interests and in yours. If all ten grand 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 accountable), you'll typically get half your deductible back, depending on the laws in your state.
Moreover, if the total expense of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as auto accident lawyer Austell GA, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance companies are not created equal. When comparing, it's worth measuring the reputations of competing agencies to find out if they pursue valid subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their customers updated as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, on the other hand, an insurance agency has a reputation of paying out claims that aren't its responsibility and then safeguarding its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.