Subrogation is a concept that's understood among insurance and legal professionals but sometimes not by the customers they represent. Even if you've never heard the word before, it would be in your benefit to understand the nuances of the process. The more you know, the better decisions you can make with regard to your insurance company.
An insurance policy you own is an assurance that, if something bad happens to you, the company on the other end of the policy will make restitutions in one way or another in a timely fashion. If your home is robbed, for instance, your property insurance agrees to remunerate you or pay for the repairs, subject to state property damage laws.
But since figuring out who is financially responsible for services or repairs is regularly a confusing affair aa‚¬" and delay sometimes adds to the damage to the policyholder aa‚¬" insurance companies in many cases opt to pay up front and figure out the blame later. They then need a way to get back the costs if, in the end, they weren't in charge of the expense.
You are in a traffic-light accident. Another car ran into yours. The police show up to assess the situation, you exchange insurance details, 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 his insurance should have paid for the repair of your vehicle. 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 reimbursement when it pays out a claim that turned out not to be its responsibility. 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 self or property. But under subrogation law, your insurer is considered to have 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 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 aa‚¬" to be precise, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its losses by upping your premiums. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get $500 back, depending on the laws in your state.
Furthermore, if the total cost 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 worker compensation terms Sandy Springs GA, pursue subrogation and wins, it will recover your losses in addition to its own.
All insurers are not the same. When comparing, it's worth weighing the records of competing agencies to determine whether they pursue winnable subrogation claims; if they do so with some expediency; if they keep their policyholders apprised as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your money 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 income by raising your premiums, you should keep looking.