The Things You Need to Know About Subrogation
Subrogation is a concept that's understood among insurance and legal companies but often not by the customers they represent. Rather than leave it to the professionals, it is in your self-interest to comprehend an overview of how it works. The more you know, the better decisions you can make about your insurance policy.
An insurance policy you have is a promise that, if something bad happens to you, the firm on the other end of the policy will make restitutions in one way or another without unreasonable delay. If your vehicle is hit, insurance adjusters (and the courts, when necessary) decide who was to blame and that person's insurance pays out.
But since determining who is financially accountable for services or repairs is typically a confusing affair – and delay often adds to the damage to the victim – insurance firms often opt to pay up front and figure out the blame after the fact. They then need a mechanism to recover the costs if, when there is time to look at all the facts, they weren't responsible for the payout.
Let's Look at an Example
You rush into the emergency room with a gouged finger. You hand the nurse your health insurance card and he writes down your policy details. You get stitched up and your insurer gets an invoice for the expenses. But the next afternoon, when you clock in at your workplace – where the accident happened – your boss hands you workers compensation forms to file. Your workers comp policy is actually responsible for the expenses, not your health insurance company. It has a vested interest in getting that money back in some way.
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim payment 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. Usually, only you can sue for damages to your person or property. But under subrogation law, your insurer is considered to have some of your rights 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.
Why Does This Matter to Me?
For a start, if your insurance policy stipulated 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 insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to recover its losses by raising your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues them efficiently, 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 accountable), you'll typically get $500 back, based on the laws in most states.
Furthermore, if the total cost 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 attorneys east olympia wa, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurance agencies are not created equal. When comparing, it's worth weighing the reputations of competing firms to find out whether they pursue legitimate subrogation claims; if they do so quickly; if they keep their policyholders posted as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, on the other hand, an insurance company has a record of paying out claims that aren't its responsibility and then covering its profit margin by raising your premiums, you'll feel the sting later.