The Things You Need to Know About Subrogation

Subrogation is a term that's well-known among insurance and legal professionals but sometimes not by the people who employ them. Rather than leave it to the professionals, it would be in your benefit to know an overview of how it works. The more information you have about it, the more likely an insurance lawsuit will work out in your favor.

Any insurance policy you own is a commitment that, if something bad happens to you, the firm on the other end of the policy will make good in a timely fashion. If your house is broken into, your property insurance steps in to repay you or facilitate the repairs, subject to state property damage laws.

But since figuring out who is financially accountable for services or repairs is usually a confusing affair – and delay in some cases adds to the damage to the policyholder – insurance firms usually decide to pay up front and figure out the blame later. They then need a mechanism to get back the costs if, when there is time to look at all the facts, they weren't in charge of the expense.

Can You Give an Example?

You go to the emergency room with a sliced-open finger. You hand the receptionist your health insurance card and he takes down your plan information. You get stitched up and your insurer gets an invoice for the tab. But the next morning, when you clock in at work – where the injury occurred – your boss hands you workers compensation forms to file. Your workers comp policy is actually responsible for the costs, not your health insurance company. It has a vested interest in getting that money back somehow.

How Does Subrogation Work?

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. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurer is considered to have some of your rights in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.

How Does This Affect Me?

For starters, if you have 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 – namely, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to recoup its losses by upping your premiums. On the other hand, if it knows which cases it is owed and goes after those cases aggressively, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get $500 back, based on the laws in most states.

Additionally, if the total loss 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 work injury lawyer paddock lake wi, successfully press a subrogation case, it will recover your costs in addition to its own.

All insurance agencies are not the same. When comparing, it's worth weighing the records of competing firms to evaluate whether they pursue legitimate subrogation claims; if they do so without delay; if they keep their customers apprised as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, on the other hand, an insurer has a record of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you'll feel the sting later.

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