Subrogation is a term that's well-known in insurance and legal circles but sometimes not by the people they represent. Even if you've never heard the word before, it would be in your self-interest to comprehend the steps of how it works. The more knowledgeable you are about it, the more likely it is that relevant proceedings will work out favorably.
Every insurance policy you own is a commitment that, if something bad occurs, the company on the other end of the policy will make good in one way or another without unreasonable delay. If you get injured while you're on the clock, for example, your company's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially responsible for services or repairs is usually a heavily involved affair – and time spent waiting sometimes compounds the damage to the victim – insurance firms in many cases opt to pay up front and figure out the blame afterward. They then need a method to get back the costs if, when there is time to look at all the facts, they weren't in charge of the expense.
Let's Look at an Example
You rush into the Instacare with a gouged finger. You hand the receptionist your health insurance card and he takes down your plan information. You get stitched up and your insurer gets an invoice for the services. But the next day, when you arrive at your workplace – where the injury occurred – your boss hands you workers compensation paperwork to turn in. Your company's workers comp policy is in fact responsible for the payout, not your health insurance. The latter has an interest in recovering its costs somehow.
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some companies 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 to your person or property. But under subrogation law, your insurer is extended some of your rights 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.
Why Should I Care?
For one thing, if your insurance policy stipulated a deductible, your insurer 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 insurer is timid on any subrogation case it might not win, it might opt to recover its costs by increasing your premiums. On the other hand, if it has a competent legal team and pursues those cases efficiently, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get $500 back, based on the laws in most states.
Additionally, 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 auto accident attorney Marietta GA, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurance agencies are not the same. When comparing, it's worth looking at the reputations of competing companies to find out whether they pursue valid subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their clients updated as the case continues; and if they then process successfully won reimbursements immediately so that you can get your losses back and move on with your life. If, instead, an insurer has a reputation of paying out claims that aren't its responsibility and then covering its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.