Subrogation and How It Affects You
Subrogation is a term that's understood in legal and insurance circles but sometimes not by the people they represent. Rather than leave it to the professionals, it is in your benefit to understand the steps of how it works. The more information you have about it, the more likely it is that an insurance lawsuit will work out favorably.
Every insurance policy you have is a commitment that, if something bad happens to you, the company on the other end of the policy will make good in one way or another without unreasonable delay. If you get injured while you're on the clock, your employer's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially responsible for services or repairs is often a confusing affair – and time spent waiting sometimes increases the damage to the policyholder – insurance companies in many cases decide to pay up front and assign blame later. They then need a mechanism to recover the costs if, when all is said and done, they weren't actually responsible for the expense.
Can You Give an Example?
Your stove catches fire and causes $10,000 in home damages. Luckily, you have property insurance and it pays for the repairs. However, in its investigation it finds out that an electrician had installed some faulty wiring, and there is a reasonable possibility that a judge would find him liable for the loss. The home has already been fixed up in the name of expediency, but your insurance company is out ten grand. What does the company do next?
How Does Subrogation Work?
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. Under ordinary circumstances, only you can sue for damages to your person or property. But under subrogation law, your insurer is given 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 Does This Matter to Me?
For starters, 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 have a stake in the outcome as well – to be precise, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to recoup its losses by increasing your premiums. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is acting both in its own interests and in yours. If all of the money 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 culpable), you'll typically get half your deductible back, depending on your state laws.
Additionally, 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 Vehicle Accident Lawyer Smyrna GA, pursue subrogation and succeeds, it will recover your losses as well as its own.
All insurers are not the same. When shopping around, it's worth looking at the reputations of competing companies to find out if they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their accountholders advised 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, on the other hand, an insurance agency has a reputation of paying out claims that aren't its responsibility and then covering its bottom line by raising your premiums, you'll feel the sting later.
Vehicle Accident Lawyer Smyrna GA