Subrogation is a concept that's well-known in legal and insurance circles but sometimes not by the customers who employ them. Even if you've never heard the word before, it is in your benefit to understand the steps of the process. The more information you have about it, the more likely relevant proceedings will work out in your favor.
Every insurance policy you have is a commitment that, if something bad happens to you, the firm on the other end of the policy will make restitutions in one way or another without unreasonable delay. If you get hurt while you're on the clock, your company's workers compensation pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially accountable for services or repairs is usually a time-consuming affair – and time spent waiting in some cases increases the damage to the policyholder – insurance companies in many cases opt to pay up front and assign blame later. They then need a way to get back the costs if, ultimately, they weren't in charge of the payout.
Can You Give an Example?
You arrive at the Instacare with a gouged finger. You hand the nurse your health insurance card and she takes down your coverage information. You get stitches and your insurer gets a bill for the medical care. But on the following morning, when you get to your workplace – where the accident happened – you are given workers compensation forms to file. Your company's workers comp policy is actually responsible for the costs, not your health insurance policy. The latter has a right to recover its money in some way.
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 done to your self or property. But under subrogation law, your insurer is extended some of your rights in exchange 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 one thing, 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 be precise, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might choose to recover its expenses by ballooning your premiums. On the other hand, if it knows which cases it is owed and pursues those cases 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 culpable), you'll typically get $500 back, depending on your state laws.
Additionally, if the total loss of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as car accident attorney Dunwoody ga, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not the same. When comparing, it's worth looking at the reputations of competing companies to determine if they pursue winnable subrogation claims; if they do so in a reasonable amount of time; if they keep their accountholders advised as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, on the other hand, an insurance agency has a record of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.