Subrogation is a concept that's understood among insurance and legal firms but often not by the customers who hire them. Rather than leave it to the professionals, it is to your advantage to comprehend the steps of the process. The more you know, the better decisions you can make with regard to your insurance company.
Every insurance policy you hold is an assurance that, if something bad happens to you, the company that insures the policy will make good in one way or another in a timely manner. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) decide who was at fault and that party's insurance covers the damages.
But since determining who is financially accountable for services or repairs is usually a tedious, lengthy affair – and time spent waiting in some cases increases the damage to the victim – insurance companies often decide to pay up front and assign blame later. They then need a way to recoup the costs if, ultimately, they weren't responsible for the expense.
You rush into the Instacare with a deeply cut finger. You hand the nurse your medical insurance card and she writes down your policy details. You get taken care of and your insurance company is billed for the services. But on the following afternoon, when you arrive at your place of employment – where the accident occurred – your boss hands you workers compensation paperwork to turn in. Your employer's workers comp policy is actually responsible for the bill, not your medical insurance policy. 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 way 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. Under ordinary circumstances, 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 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.
Why Should I Care?
For one thing, if your insurance policy stipulated a deductible, your insurance company wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to the tune of $1,000. If your insurer is timid on any subrogation case it might not win, it might opt to get back its expenses by increasing your premiums. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get half your deductible back, depending on the laws in your state.
Moreover, if the total expense 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 child custody lawyer boulder city Nv, successfully press a subrogation case, it will recover your costs as well as its own.
All insurance companies are not created equal. When comparing, it's worth comparing the reputations of competing agencies to determine if they pursue winnable subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their customers apprised as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, instead, an insurance agency has a record of honoring claims that aren't its responsibility and then safeguarding its income by raising your premiums, even attractive rates won't outweigh the eventual headache.