The Things You Need to Know About Subrogation
Subrogation is an idea that's understood in legal and insurance circles but often not by the people who hire them. Rather than leave it to the professionals, it is in your self-interest to know the steps of how it works. The more you know about it, the better decisions you can make with regard to your insurance company.
Every insurance policy you have is a promise that, if something bad happens to you, the company that covers the policy will make restitutions without unreasonable delay. If you get an injury while working, your employer's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially responsible for services or repairs is regularly a tedious, lengthy affair – and delay often adds to the damage to the policyholder – insurance companies in many cases decide to pay up front and figure out the blame after the fact. They then need a way to regain the costs if, when all the facts are laid out, they weren't actually in charge of the payout.
Let's Look at an Example
You arrive at the hospital with a sliced-open finger. You hand the nurse your medical insurance card and he writes down your plan details. You get stitched up and your insurance company is billed for the tab. But the next morning, when you clock in at your workplace – where the injury occurred – your boss hands you workers compensation paperwork to fill out. Your employer's workers comp policy is in fact responsible for the invoice, not your medical insurance policy. The latter has an interest in recovering its costs in some way.
How Subrogation Works
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. Ordinarily, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is extended some of your rights for making good on 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 Policyholders?
For a start, 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 have a stake in the outcome as well – to the tune of $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to recover its losses by raising your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues those cases enthusiastically, it is doing you a favor as well as itself. If all of the money 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.
In addition, if the total price 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 criminal defense law Pleasant Grove UT, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurers are not created equal. When shopping around, it's worth looking at the reputations of competing companies to evaluate if they pursue valid subrogation claims; if they resolve those claims fast; if they keep their clients informed as the case goes on; 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 agency has a reputation of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you'll feel the sting later.