What You Need to Know About Subrogation
Subrogation is an idea that's well-known in legal and insurance circles but sometimes not by the people who hire them. Rather than leave it to the professionals, it would be to your advantage to understand the steps of the process. The more information you have, the better decisions you can make with regard to your insurance company.
An insurance policy you hold is a commitment that, if something bad occurs, the business on the other end of the policy will make restitutions without unreasonable delay. If your property is broken into, your property insurance agrees to compensate you or enable the repairs, subject to state property damage laws.
But since figuring out who is financially accountable for services or repairs is sometimes a heavily involved affair – and time spent waiting in some cases compounds the damage to the victim – insurance companies in many cases decide to pay up front and figure out the blame after the fact. They then need a means to regain the costs if, in the end, they weren't actually responsible for the payout.
For Example
You are in a highway accident. Another car crashed into yours. Police are called, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later police tell the insurance companies that the other driver was at fault and her insurance should have paid for the repair of your auto. How does your company get its funds back?
How Subrogation Works
This is where subrogation comes in. It is the way that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. Some companies 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 given 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 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 lax about bringing subrogation cases to court, it might choose to get back its costs by increasing your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all 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 at fault), you'll typically get half your deductible back, depending on the laws in your state.
Furthermore, if the total loss of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as immigration attorney near me Sandy Ut, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurers are not the same. When shopping around, it's worth scrutinizing the records of competing companies to determine whether they pursue legitimate subrogation claims; if they resolve those claims without delay; if they keep their policyholders updated as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, on the other hand, an insurance agency has a record of paying out claims that aren't its responsibility and then safeguarding its profit margin by raising your premiums, you'll feel the sting later.