Subrogation is an idea that's understood among insurance and legal companies but often not by the policyholders who hire them. Even if you've never heard the word before, it would be in your benefit to understand an overview of how it works. The more information you have about it, the more likely it is that relevant proceedings will work out favorably.
Any insurance policy you own is an assurance that, if something bad happens to you, the company that insures the policy will make restitutions in one way or another without unreasonable delay. If a windstorm damages your property, your property insurance agrees to compensate you or enable the repairs, subject to state property damage laws.
But since figuring out who is financially responsible for services or repairs is regularly a tedious, lengthy affair – and time spent waiting sometimes compounds the damage to the victim – insurance companies often opt to pay up front and figure out the blame later. They then need a way to get back the costs if, when all the facts are laid out, they weren't in charge of the expense.
Can You Give an Example?
You rush into the emergency room with a sliced-open finger. You give the receptionist your health insurance card and he records your coverage details. You get taken care of and your insurance company gets an invoice for the services. But on the following morning, when you get to your workplace – where the accident occurred – your boss hands you workers compensation forms to turn in. Your company's 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 when it pays out a claim that turned out not to be its responsibility. 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 insurance company is extended 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 Me?
For starters, if you have a deductible, your insurance company wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might choose to recoup its expenses by ballooning your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after those cases efficiently, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent to blame), you'll typically get half your deductible back, based on the laws in most states.
Moreover, 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 work injury Canton, ga, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurance agencies are not the same. When shopping around, it's worth measuring the reputations of competing agencies to find out if they pursue valid subrogation claims; if they do so in a reasonable amount of time; if they keep their clients advised as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your funding back and move on with your life. If, on the other hand, an insurance agency has a record of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you should keep looking.