Subrogation is a term that's understood in insurance and legal circles but often not by the customers who hire them. Rather than leave it to the professionals, it is in your benefit to know the nuances of the process. The more information you have about it, the more likely relevant proceedings will work out in your favor.
An insurance policy you hold is a promise that, if something bad happens to you, the firm that insures the policy will make restitutions in a timely manner. If you get an injury on the job, for example, your company's workers compensation insurance picks up the tab 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 heavily involved affair – and delay sometimes compounds the damage to the victim – insurance firms often decide to pay up front and assign blame afterward. They then need a means to recoup the costs if, ultimately, they weren't actually in charge of the payout.
You are in a vehicle accident. Another car crashed 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 his insurance policy should have paid for the repair of your auto. How does your insurance company get its funds back?
How Subrogation Works
This is where subrogation comes in. It is the way that an insurance company uses to claim payment 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. Under ordinary circumstances, only you can sue for damages to your person or property. But under subrogation law, your insurance company is extended some of your rights for making good on 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 Me?
For starters, 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 – 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 has a competent legal team and pursues those cases aggressively, it is doing you a favor as well as itself. 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 to blame), you'll typically get half your deductible back, based on the laws in most states.
Furthermore, if the total expense 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 Criminal defense taylorsville ut, successfully press a subrogation case, it will recover your costs as well as its own.
All insurers are not the same. When comparing, it's worth weighing the records of competing firms to find out if they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their clients posted as the case proceeds; 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, instead, an insurer 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.