Subrogation is an idea that's well-known in insurance and legal circles but sometimes not by the people who hire them. Rather than leave it to the professionals, it is in your benefit to comprehend an overview of how it works. The more you know, the more likely relevant proceedings will work out in your favor.

Every insurance policy you hold is a commitment that, if something bad happens to you, the business that covers the policy will make restitutions in one way or another in a timely manner. If your vehicle is in a fender-bender, insurance adjusters (and the courts, when necessary) decide who was to blame and that person's insurance pays out.

But since determining who is financially responsible for services or repairs is sometimes a time-consuming affair – and time spent waiting sometimes increases the damage to the victim – insurance firms in many cases opt to pay up front and assign blame after the fact. They then need a way to get back the costs if, when all is said and done, they weren't responsible for the payout.

Can You Give an Example?

Your stove catches fire and causes $10,000 in house damages. Fortunately, you have property insurance and it pays for the repairs. However, in its investigation it discovers that an electrician had installed some faulty wiring, and there is a reasonable possibility that a judge would find him liable for the loss. You already have your money, but your insurance company is out all that money. What does the company do next?

How Does Subrogation Work?

This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some companies 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 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 that was originally due to you, because it has covered the amount already.

How Does This Affect Me?

For one thing, if your insurance policy stipulated a deductible, your insurer wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might choose to get back its expenses by boosting your premiums. On the other hand, if it has a knowledgeable legal team and goes after those cases enthusiastically, it is doing you a favor as well as itself. If all $10,000 is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half at fault), you'll typically get $500 back, based on the laws in most states.

In addition, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely spendy. If your insurance company or its property damage lawyers, such as Criminal Defense Attorney Hillsboro Or, successfully press a subrogation case, it will recover your costs in addition to its own.

All insurance agencies are not the same. When shopping around, it's worth looking up the reputations of competing companies to determine if they pursue winnable subrogation claims; if they resolve those claims fast; if they keep their clients informed as the case goes on; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, on the other hand, an insurance firm has a reputation of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.