Subrogation is a term that's understood in insurance and legal circles but sometimes not by the policyholders who hire them. Even if you've never heard the word before, it would be in your benefit to understand the nuances of how it works. The more information you have about it, the more likely an insurance lawsuit will work out favorably.
Any insurance policy you hold is a commitment that, if something bad occurs, the insurer of the policy will make restitutions in one way or another in a timely manner. 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 determining who is financially responsible for services or repairs is typically a heavily involved affair – and delay sometimes adds to the damage to the policyholder – insurance companies usually opt to pay up front and assign blame after the fact. They then need a means to get back the costs if, in the end, they weren't in charge of the expense.
Can You Give an Example?
You go to the Instacare with a sliced-open finger. You hand the nurse your health insurance card and she writes down your plan details. You get stitched up and your insurance company gets an invoice for the expenses. But the next day, when you get to your place of employment – where the injury happened – you are given workers compensation forms to turn in. Your workers comp policy is in fact responsible for the expenses, not your health insurance company. It has a vested interest in getting that money back in some way.
How Subrogation Works
This is where subrogation comes in. It is the method 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. Normally, only you can sue for damages to your self or property. But under subrogation law, your insurance company is considered to have 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.
How Does This Affect the Insured?
For one thing, if your insurance policy stipulated a deductible, it wasn't just your insurance company that 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 lax about bringing subrogation cases to court, it might opt to recoup its losses by upping your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half to blame), you'll typically get $500 back, depending on your state laws.
In addition, if the total price of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as employment attorney university place wa, pursue subrogation and succeeds, it will recover your losses in addition to its own.
All insurers are not the same. When shopping around, it's worth looking at the reputations of competing firms to determine whether they pursue legitimate subrogation claims; if they do so without dragging their feet; if they keep their clients advised as the case proceeds; 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, instead, an insurance company has a record of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you'll feel the sting later.