Subrogation is a term that's well-known in insurance and legal circles but often not by the policyholders they represent. Rather than leave it to the professionals, it would be in your benefit to comprehend an overview of the process. The more you know, the better decisions you can make about your insurance company.
Any insurance policy you own is a promise that, if something bad occurs, the company that covers the policy will make restitutions in one way or another in a timely fashion. If you get hurt at work, your employer's workers compensation insurance picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially accountable for services or repairs is usually a time-consuming affair – and delay often compounds the damage to the victim – insurance firms often decide to pay up front and figure out the blame later. They then need a means to get back the costs if, when all the facts are laid out, they weren't actually responsible for the payout.
Can You Give an Example?
You arrive at the hospital with a gouged finger. You give the nurse your medical insurance card and she takes down your plan details. You get stitches and your insurance company is billed for the services. But the next morning, when you get to work – where the injury happened – your boss hands you workers compensation forms to file. Your employer's workers comp policy is in fact responsible for the hospital trip, not your medical insurance. The latter has an interest in recovering 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 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 self or property. But under subrogation law, your insurance company is given some of your rights 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 starters, 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 lost some money too – 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 boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed 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 deductible back. If it recovers half (for instance, in a case where you are found one-half culpable), you'll typically get half your deductible back, depending on the laws in your state.
In addition, if the total expense 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 child custody lawyers near me Henderson NV, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurers are not the same. When shopping around, it's worth contrasting the reputations of competing firms to find out whether they pursue valid subrogation claims; if they resolve those claims with some expediency; if they keep their policyholders apprised 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, on the other hand, an insurance company has a reputation of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.