What You Need to Know About Subrogation
Subrogation is an idea that's well-known among legal and insurance professionals but rarely by the people who hire them. Even if it sounds complicated, it would be in your benefit to comprehend the nuances of how it works. The more you know, the better decisions you can make with regard to your insurance policy.
An insurance policy you have is a promise that, if something bad happens to you, the company that covers the policy will make restitutions in a timely manner. If your vehicle is rear-ended, insurance adjusters (and the judicial system, when necessary) decide who was at fault and that person's insurance pays out.
But since figuring out who is financially accountable for services or repairs is usually a time-consuming affair – and time spent waiting often adds to the damage to the victim – insurance companies often decide to pay up front and figure out the blame after the fact. They then need a path to recoup the costs if, when all the facts are laid out, they weren't responsible for the payout.
Can You Give an Example?
Your garage catches fire and causes $10,000 in house damages. Happily, you have property insurance and it pays out your claim in full. However, in its investigation it discovers that an electrician had installed some faulty wiring, and there is a decent chance that a judge would find him responsible for the loss. The house has already been fixed up in the name of expediency, but your insurance company is out all that money. What does the company do next?
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 self or property. But under subrogation law, your insurance company 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.
Why Should I Care?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its costs by upping 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 doing you a favor as well as itself. If all $10,000 is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get $500 back, based on the laws in most states.
Moreover, if the total cost of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as Auto accident lawyer Powder Springs GA, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurers are not created equal. When comparing, it's worth scrutinizing the reputations of competing companies to find out if they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their clients informed as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your losses 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 covering its income by raising your premiums, you should keep looking.
Auto accident lawyer Powder Springs GA