Subrogation is an idea that's understood in legal and insurance circles but sometimes not by the customers who employ them. Rather than leave it to the professionals, it would be in your benefit to know the steps of how it works. The more information you have, the more likely it is that relevant proceedings will work out in your favor.
Any insurance policy you have is a commitment that, if something bad occurs, the company that insures the policy will make good without unreasonable delay. If you get injured at work, for instance, your company's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially responsible for services or repairs is regularly a confusing affair – and time spent waiting sometimes increases the damage to the victim – insurance companies usually decide to pay up front and figure out the blame later. They then need a path to get back the costs if, once the situation is fully assessed, they weren't actually responsible for the expense.
You are in an auto accident. Another car ran into yours. The police show up to assess the situation, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later police tell the insurance companies that the other driver was entirely at fault and his insurance policy should have paid for the repair of your car. How does your company get its funds back?
How Does Subrogation Work?
This is where subrogation comes in. It is the way 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 done to your self 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 Individuals?
For a start, if you have a deductible, it wasn't just your insurer who 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 insurer is timid on any subrogation case it might not win, it might opt to recoup its expenses by upping your premiums. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is doing you a favor as well as itself. If all $10,000 is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get half your deductible back, depending on the laws in your state.
Additionally, if the total cost of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely spendy. If your insurance company or its property damage lawyers, such as discrimination attorney tacoma wa, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance agencies are not created equal. When shopping around, it's worth researching the records of competing firms to evaluate if they pursue legitimate subrogation claims; if they resolve those claims fast; if they keep their customers advised 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, on the other hand, an insurance firm has a reputation of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.