The Things You Need to Know About Subrogation
Subrogation is a concept that's well-known among legal and insurance professionals but often not by the policyholders they represent. If this term has come up when dealing with your insurance agent or a legal proceeding, it would be in your benefit to understand the nuances of how it works. The more you know about it, the more likely it is that relevant proceedings will work out in your favor.
Every insurance policy you hold is a promise that, if something bad happens to you, the company that covers the policy will make good in one way or another in a timely manner. If you get an injury while working, for instance, your company's workers compensation pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially accountable for services or repairs is often a confusing affair – and time spent waiting sometimes increases the damage to the victim – insurance firms often decide to pay up front and assign blame after the fact. They then need a method to regain the costs if, when all is said and done, they weren't actually in charge of the payout.
Can You Give an Example?
You arrive at the Instacare with a deeply cut finger. You give the nurse your medical insurance card and he takes down your policy details. You get stitched up and your insurer gets a bill for the tab. But on the following morning, when you get to your place of employment – where the injury occurred – your boss hands you workers compensation paperwork to file. Your workers comp policy is actually responsible for the bill, not your medical insurance policy. 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 way that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. Some companies 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 done to your person or property. But under subrogation law, your insurer is given 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 Individuals?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurer that 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 choose to get back 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 efficiently, it is doing you a favor as well as itself. If all ten grand is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get half your deductible back, depending on your state laws.
Furthermore, if the total price 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 Norcross personal injury lawyer, pursue subrogation and wins, it will recover your expenses as well as its own.
All insurance agencies are not the same. When comparing, it's worth scrutinizing the records of competing companies to evaluate if they pursue winnable subrogation claims; if they do so fast; if they keep their customers posted as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your money back and move on with your life. If, on the other hand, an insurer has a record of paying out claims that aren't its responsibility and then protecting its profitability by raising your premiums, you should keep looking.