Subrogation is a concept that's well-known among legal and insurance firms but sometimes not by the customers who employ them. Even if it sounds complicated, it would be in your benefit to comprehend the steps of the process. The more information you have about it, the more likely relevant proceedings will work out in your favor.

Every insurance policy you own is a promise that, if something bad occurs, the firm on the other end of the policy will make restitutions in a timely fashion. If your property is robbed, your property insurance steps in to remunerate you or enable the repairs, subject to state property damage laws.

But since ascertaining who is financially accountable for services or repairs is sometimes a time-consuming affair – and delay often increases the damage to the policyholder – insurance firms in many cases opt to pay up front and assign blame later. They then need a method to recoup the costs if, when all the facts are laid out, they weren't actually responsible for the expense.

Can You Give an Example?

You go to the Instacare with a deeply cut finger. You hand the receptionist your medical insurance card and she writes down your coverage information. You get stitched up and your insurance company gets an invoice for the expenses. But on the following morning, when you clock in at your workplace – where the accident occurred – your boss hands you workers compensation paperwork to fill out. Your workers comp policy is in fact responsible for the invoice, not your medical insurance policy. It has a vested interest in getting that money back in some way.

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. Ordinarily, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is given some of your rights in exchange 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 Individuals?

For one thing, if your insurance policy stipulated a deductible, your insurance company wasn't the only one 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 insurer is lax about bringing subrogation cases to court, it might choose to recoup its expenses by ballooning your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after those cases aggressively, 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 one-half accountable), you'll typically get $500 back, based on the laws in most states.

Moreover, if the total loss of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as criminal defense attorney american fork, successfully press a subrogation case, it will recover your expenses as well as its own.

All insurance agencies are not the same. When shopping around, it's worth contrasting the records of competing companies to determine if they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their customers 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, on the other hand, an insurer has a reputation of honoring claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you'll feel the sting later.