Subrogation is an idea that's well-known among legal and insurance professionals but rarely by the people they represent. Even if you've never heard the word before, it is in your benefit to know the steps of the process. The more information you have, the more likely relevant proceedings will work out in your favor.
Every insurance policy you own is a promise that, if something bad occurs, the business that insures the policy will make good without unreasonable delay. If you get an injury while working, for example, your company's workers compensation insurance 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 regularly a confusing affair – and time spent waiting sometimes compounds the damage to the victim – insurance firms often opt to pay up front and assign blame afterward. They then need a mechanism to get back the costs if, when all is said and done, they weren't responsible for the expense.
Can You Give an Example?
You arrive at the Instacare with a sliced-open finger. You give the nurse your health insurance card and he records your plan information. You get taken care of and your insurance company is billed for the medical care. But on the following morning, when you clock in at your place of employment – where the accident occurred – you are given workers compensation forms to fill out. Your employer's workers comp policy is in fact responsible for the costs, not your health insurance company. The latter has an interest in recovering its costs in some way.
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement 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. Usually, 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 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 a start, if you have a deductible, your insurance company 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 insurer is timid on any subrogation case it might not win, it might choose to get back its costs by raising your premiums. On the other hand, if it has a capable legal team and pursues them aggressively, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get half your deductible back, based on the laws in most states.
Furthermore, if the total expense of an accident is over 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 Puyallup WA, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurers are not the same. When shopping around, it's worth looking at the records of competing agencies to find out whether they pursue legitimate subrogation claims; if they resolve those claims fast; if they keep their customers informed as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, instead, an insurer has a reputation of paying out claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.