The Things You Need to Know About Subrogation
Subrogation is a concept that's understood among legal and insurance companies but sometimes not by the people who employ them. Even if it sounds complicated, it is to your advantage to comprehend the steps of how it works. The more information you have, the better decisions you can make about your insurance policy.
Any insurance policy you own is a promise that, if something bad happens to you, the insurer of the policy will make good without unreasonable delay. If you get an injury at work, for example, your company's workers compensation pays out 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 sometimes a tedious, lengthy affair – and delay often compounds the damage to the victim – insurance firms often opt to pay up front and figure out the blame afterward. They then need a method to recoup the costs if, when all is said and done, they weren't actually responsible for the payout.
Let's Look at an Example
You are in a car accident. Another car ran into yours. The police show up to assess the situation, you exchange insurance information, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later police tell the insurance companies that the other driver was entirely to blame and her insurance policy should have paid for the repair of your auto. How does your company get its funds back?
How Does Subrogation Work?
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. Under ordinary circumstances, only you can sue for damages to your self or property. But under subrogation law, your insurance company is given some of your rights for having taken care of the damages. It can go after the money 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, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to recover its costs by boosting your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and pursues those cases enthusiastically, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent at fault), you'll typically get half your deductible back, depending on your state laws.
Furthermore, if the total cost 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 best family law firm Las Vegas NV, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance companies are not created equal. When shopping around, it's worth weighing the records of competing companies to determine whether they pursue legitimate subrogation claims; if they do so quickly; 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 deductible back and move on with your life. If, instead, an insurance firm has a reputation of honoring claims that aren't its responsibility and then protecting its profitability by raising your premiums, you should keep looking.