Subrogation is a term that's understood in legal and insurance circles but often not by the people who employ them. Rather than leave it to the professionals, it is in your benefit to comprehend an overview of the process. The more information you have about it, the better decisions you can make about your insurance policy.
Any insurance policy you have is an assurance that, if something bad occurs, the firm that insures the policy will make restitutions without unreasonable delay. If you get an injury while working, for instance, your employer's workers compensation insurance agrees to pay 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 usually a time-consuming affair – and time spent waiting in some cases compounds the damage to the victim – insurance companies in many cases opt to pay up front and figure out the blame after the fact. They then need a mechanism to regain the costs if, once the situation is fully assessed, they weren't actually in charge of the payout.
You are in an auto accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance information, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was to blame and her insurance should have paid for the repair of your car. How does your insurance company get its funds back?
How Does Subrogation Work?
This is where subrogation comes in. It is the process that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. Some companies 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 insurer is extended 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 Individuals?
For a start, 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 the tune of $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to get back its expenses by raising your premiums and call it a day. On the other hand, if it has a capable legal team and pursues them enthusiastically, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get $500 back, depending on the laws in your state.
In addition, if the total loss 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 lawyer Powder Springs, GA, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance agencies are not the same. When comparing, it's worth contrasting the records of competing firms to evaluate if they pursue valid subrogation claims; if they do so with some expediency; if they keep their customers advised as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, instead, an insurance company has a reputation of paying out claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you'll feel the sting later.