Subrogation is an idea that's well-known in insurance and legal circles but often not by the people who hire them. Rather than leave it to the professionals, it is to your advantage to comprehend the steps of the process. The more knowledgeable you are, the better decisions you can make about your insurance company.
Every insurance policy you have is a commitment that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another in a timely manner. If your vehicle is hit, insurance adjusters (and police, when necessary) determine who was at fault and that party's insurance pays out.
But since figuring out who is financially responsible for services or repairs is typically a tedious, lengthy affair – and delay often increases the damage to the victim – insurance firms often decide to pay up front and assign blame later. They then need a method to regain the costs if, once the situation is fully assessed, they weren't in charge of the expense.
Let's Look at an Example
You arrive at the Instacare with a deeply cut finger. You give the nurse your health insurance card and she takes down your coverage details. You get taken care of and your insurer is billed for the services. But the next afternoon, when you arrive at work – where the injury happened – your boss hands you workers compensation paperwork to fill out. Your workers comp policy is actually responsible for the hospital visit, not your health insurance company. The latter has an interest in recovering its costs somehow.
How Subrogation Works
This is where subrogation comes in. It is the process 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. Under ordinary circumstances, only you can sue for damages 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 Does This Matter to Me?
For one thing, if you have a deductible, your insurer wasn't the only one that 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 unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its costs by ballooning your premiums and call it a day. On the other hand, if it has a competent legal team and goes after those cases aggressively, it is acting both in its own interests and in yours. If all $10,000 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 culpable), you'll typically get $500 back, depending on the laws in your state.
Furthermore, if the total price 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 workers comp attorney Duluth, pursue subrogation and wins, it will recover your losses as well as its own.
All insurance agencies are not created equal. When shopping around, it's worth contrasting the reputations of competing agencies to determine whether they pursue winnable subrogation claims; if they resolve those claims without delay; if they keep their customers updated as the case continues; 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 covering its profit margin by raising your premiums, you should keep looking.