Subrogation is a concept that's well-known among insurance and legal companies but sometimes not by the policyholders who hire them. Even if it sounds complicated, it is to your advantage to understand the steps of the process. The more you know about it, the more likely an insurance lawsuit will work out favorably.
Any insurance policy you have is a promise that, if something bad occurs, the business that covers the policy will make good in one way or another without unreasonable delay. If you get hurt on the job, your company's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially responsible for services or repairs is typically a time-consuming affair – and delay sometimes compounds the damage to the victim – insurance firms usually decide to pay up front and assign blame afterward. They then need a means to recoup the costs if, ultimately, they weren't actually in charge of the payout.
You rush into the doctor's office with a sliced-open finger. You give the receptionist your medical insurance card and she takes down your plan details. You get stitched up and your insurer gets a bill for the services. But on the following day, when you clock in at work – where the accident occurred – your boss hands you workers compensation forms to fill out. Your company's workers comp policy is in fact responsible for the payout, not your medical insurance company. It has a vested interest in getting that money back somehow.
How Subrogation Works
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 done to your person or property. But under subrogation law, your insurer is extended some of your rights for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Should I Care?
For one thing, if you have a deductible, it wasn't just your insurer that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – 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 costs by increasing your premiums. On the other hand, if it has a knowledgeable legal team and goes after them enthusiastically, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get half your deductible back, depending on your state laws.
Additionally, if the total price of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as personal injury lawyer Norcross, pursue subrogation and wins, it will recover your costs in addition to its own.
All insurers are not created equal. When comparing, it's worth looking at the records of competing companies to determine if they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their clients informed 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 record of paying out claims that aren't its responsibility and then safeguarding its profit margin by raising your premiums, you should keep looking.