Subrogation is a term that's understood among legal and insurance professionals but sometimes not by the customers who hire them. Rather than leave it to the professionals, it is to your advantage to comprehend the nuances of the process. The more knowledgeable you are about it, the more likely it is that an insurance lawsuit will work out favorably.
An insurance policy you hold is a promise that, if something bad happens to you, the company on the other end of the policy will make restitutions without unreasonable delay. If you get an injury while you're on the clock, your company's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially accountable for services or repairs is often a confusing affair – and delay sometimes increases the damage to the victim – insurance companies in many cases decide to pay up front and figure out the blame later. They then need a way to get back the costs if, when there is time to look at all the facts, they weren't actually in charge of the payout.
For Example
You rush into the emergency room with a sliced-open finger. You give the nurse your medical insurance card and he writes down your policy information. You get stitches and your insurance company is billed for the tab. But on the following day, when you get to your workplace – where the accident occurred – you are given workers compensation forms to turn in. Your company's workers comp policy is in fact responsible for the expenses, 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 way 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 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 originally due to you, because it has covered the amount already.
How Does This Affect the Insured?
For a start, if your insurance policy stipulated 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 lost some money too – namely, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recoup its losses by boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues them aggressively, it is acting both in its own interests and in yours. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent at fault), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total cost of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as Lawyers serving Sumner wa, pursue subrogation and succeeds, it will recover your expenses in addition to its own.
All insurers are not created equal. When comparing, it's worth weighing the records of competing companies to evaluate if they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their clients updated as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your losses back and move on with your life. If, instead, an insurance firm has a record of paying out claims that aren't its responsibility and then covering its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.