Subrogation is a term that's understood among legal and insurance professionals but often not by the people who hire them. If this term has come up when dealing with your insurance agent or a legal proceeding, it is in your benefit to understand the nuances of the process. The more knowledgeable you are about it, the better decisions you can make about your insurance company.
Any insurance policy you hold is a commitment that, if something bad happens to you, the company on the other end of the policy will make restitutions in one way or another without unreasonable delay. If you get an injury while working, for instance, your company's workers compensation agrees to pay 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 typically a time-consuming affair – and delay sometimes compounds the damage to the victim – insurance firms often opt to pay up front and assign blame later. They then need a mechanism to recover the costs if, when there is time to look at all the facts, they weren't actually in charge of the expense.
Can You Give an Example?
You are in a car accident. Another car collided with yours. Police are called, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was entirely at fault and her insurance should have paid for the repair of your auto. How does your company get its money back?
How Subrogation Works
This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement when it pays out a claim that turned out not to be its responsibility. 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 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.
How Does This Affect Me?
For one thing, if you have 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 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 boosting your premiums. On the other hand, if it has a capable legal team and pursues them aggressively, it is doing you a favor as well as itself. 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 to blame), 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 could be in for a stiff bill. If your insurance company or its property damage lawyers, such as probate attorney paddock lake wi, pursue subrogation and wins, it will recover your costs as well as its own.
All insurance agencies are not the same. When shopping around, it's worth researching the reputations of competing companies to find out if they pursue legitimate subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their accountholders apprised as the case continues; 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, instead, an insurer has a reputation of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you should keep looking.probate attorney paddock lake wi