Subrogation is an idea that's well-known among insurance and legal firms but sometimes not by the policyholders who employ them. Even if you've never heard the word before, it is in your self-interest to understand the steps of the process. The more you know, the more likely it is that an insurance lawsuit will work out in your favor.
An insurance policy you have is an assurance that, if something bad occurs, the insurer of the policy will make good in one way or another without unreasonable delay. If your vehicle is rear-ended, insurance adjusters (and the courts, when necessary) determine who was to blame and that party's insurance covers the damages.
But since ascertaining who is financially responsible for services or repairs is regularly a tedious, lengthy affair – and time spent waiting sometimes adds to the damage to the policyholder – insurance companies often decide to pay up front and assign blame after the fact. They then need a path to recover the costs if, when there is time to look at all the facts, they weren't actually responsible for the expense.
Can You Give an Example?
You rush into the hospital with a gouged finger. You hand the nurse your health insurance card and she records your plan information. You get taken care of and your insurer is billed for the services. But on the following afternoon, when you clock in at your workplace – where the injury happened – you are given workers compensation forms to turn in. Your company's workers comp policy is in fact responsible for the invoice, not your health insurance company. 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 reimbursement after it has paid for something that should have been paid by some other entity. Some companies 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 to your self or property. But under subrogation law, your insurer is extended some of your rights in exchange for having taken care of the damages. It can go after the money that was originally due to you, because it has covered the amount already.
How Does This Affect Me?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurer that had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to be precise, $1,000. If your insurer is timid on any subrogation case it might not win, it might opt to recover its losses by ballooning your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get half your deductible back, depending on your state laws.
In addition, if the total loss of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as family law lawyer Tumwater, WA, successfully press a subrogation case, it will recover your costs in addition to its own.
All insurance companies are not created equal. When comparing, it's worth examining the reputations of competing agencies to find out whether they pursue valid subrogation claims; if they do so without delay; if they keep their clients apprised as the case continues; and if they then process successfully won reimbursements quickly so that you can get your funding back and move on with your life. If, instead, an insurer has a record of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.