The Things Every Policy holder Ought to Know About Subrogation

Subrogation is an idea that's understood in insurance and legal circles but rarely by the policyholders they represent. Rather than leave it to the professionals, it would be in your benefit to understand an overview of the process. The more you know about it, the better decisions you can make about your insurance policy.

An insurance policy you own is an assurance that, if something bad occurs, the company on the other end of the policy will make restitutions in one way or another without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and the courts, when necessary) determine who was to blame and that party's insurance pays out.

But since determining who is financially accountable for services or repairs is sometimes a time-consuming affair – and time spent waiting sometimes increases the damage to the victim – insurance firms often opt to pay up front and figure out the blame afterward. They then need a way to recoup 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 doctor's office with a deeply cut finger. You give the nurse your medical insurance card and he writes down your plan details. You get taken care of and your insurance company is billed for the tab. But on the following morning, when you get to your place of employment – where the injury occurred – you are given workers compensation forms to turn in. Your workers comp policy is in fact responsible for the invoice, not your medical insurance policy. The latter has a right to recover its money somehow.

How Does Subrogation Work?

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 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 done to your person or property. But under subrogation law, your insurance company 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.

Why Does This Matter to Me?

For one thing, if your insurance policy stipulated a deductible, it wasn't just your insurance company that 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 insurance company is timid on any subrogation case it might not win, it might opt to get back its losses by raising your premiums. On the other hand, if it has a proficient legal team and goes after 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 $500 back, based on the laws in most states.

In addition, if the total expense 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 attorney for child custody Springville ut, successfully press a subrogation case, it will recover your expenses in addition to its own.

All insurers are not created equal. When shopping around, it's worth looking at the reputations of competing agencies to evaluate if they pursue legitimate subrogation claims; if they resolve those claims without delay; if they keep their account holders updated as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, instead, an insurance company has a reputation of paying out claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you should keep looking.