Subrogation is a term that's well-known among insurance and legal companies but often not by the people they represent. Rather than leave it to the professionals, it is in your benefit to understand the nuances of how it works. The more knowledgeable you are, the more likely it is that relevant proceedings will work out in your favor.
Every insurance policy you own is a commitment that, if something bad happens to you, the firm that insures the policy will make good in one way or another without unreasonable delay. If a hailstorm damages your home, for example, your property insurance agrees to repay you or facilitate the repairs, subject to state property damage laws.
But since ascertaining who is financially responsible for services or repairs is regularly a confusing affair – and time spent waiting in some cases compounds the damage to the policyholder – insurance firms often decide to pay up front and assign blame afterward. They then need a way to regain the costs if, ultimately, they weren't responsible for the expense.
You rush into the Instacare with a gouged finger. You hand the nurse your medical insurance card and she records your plan information. You get taken care of and your insurer is billed for the expenses. But on the following day, when you arrive at work – where the injury occurred – you are given workers compensation paperwork to turn in. Your company's workers comp policy is in fact responsible for the hospital trip, 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 method that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. 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. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurer is extended 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.
Why Do I Need to Know This?
For starters, 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 lost some money too – to the tune of $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might choose to get back its expenses by boosting your premiums. On the other hand, if it has a proficient legal team and pursues those cases enthusiastically, it is acting both in its own interests and in yours. If all of the money 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 responsible), you'll typically get $500 back, depending on the laws in your state.
Furthermore, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely expensive. If your insurance company or its property damage lawyers, such as lawyers in immigration Herriman UT, pursue subrogation and succeeds, it will recover your losses in addition to its own.
All insurance companies are not created equal. When shopping around, it's worth examining the records of competing agencies to determine if they pursue valid subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their clients updated as the case continues; 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 insurer has a reputation 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.