Subrogation is an idea that's understood in legal and insurance circles but often not by the customers who employ them. Even if you've never heard the word before, it would be in your self-interest to understand an overview of the process. The more information you have, the better decisions you can make with regard to your insurance company.
Any insurance policy you have is a commitment that, if something bad occurs, the insurer of the policy will make restitutions without unreasonable delay. If you get an injury while you're on the clock, your employer's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially responsible for services or repairs is often a confusing affair – and delay often compounds the damage to the policyholder – insurance firms usually opt to pay up front and assign blame afterward. They then need a way to get back the costs if, when all the facts are laid out, they weren't in charge of the expense.
Let's Look at an Example
You rush into the emergency room with a sliced-open finger. You hand the nurse your medical insurance card and she takes down your policy information. You get taken care of and your insurance company gets an invoice for the tab. But on the following morning, when you get to your place of employment – where the injury happened – your boss hands you workers compensation paperwork to turn in. Your employer's workers comp policy is in fact responsible for the bill, not your medical insurance. It has a vested interest in getting that money back in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the process 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. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is given 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 one thing, if you have a deductible, it wasn't just your insurance company who 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 insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its expenses by boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after them efficiently, 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 culpable), you'll typically get half your deductible back, depending on your state laws.
Furthermore, if the total price of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as personal injury law firm Bonney Lake WA, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurers are not the same. When comparing, it's worth scrutinizing the reputations of competing agencies to evaluate whether they pursue legitimate subrogation claims; if they resolve those claims without delay; if they keep their customers apprised as the case goes on; 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 honoring claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you'll feel the sting later.