Subrogation is a concept that's understood among legal and insurance firms but sometimes not by the customers who employ them. Rather than leave it to the professionals, it is in your benefit to comprehend the nuances of how it works. The more information you have about it, the better decisions you can make about your insurance company.
Any insurance policy you have is a commitment that, if something bad happens to you, the insurer of the policy will make restitutions without unreasonable delay. If you get an injury while working, your employer's workers compensation insurance picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially accountable for services or repairs is sometimes a time-consuming affair – and delay sometimes adds to the damage to the policyholder – insurance companies usually decide to pay up front and figure out the blame after the fact. They then need a way to recoup the costs if, when all is said and done, they weren't in charge of the expense.
Can You Give an Example?
You are in a highway accident. Another car crashed 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 it's determined that the other driver was to blame and her insurance policy should have paid for the repair of your auto. How does your company get its funds back?
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. 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 to your self or property. But under subrogation law, your insurer is considered to have some of your rights in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Does This Matter to Me?
For a start, 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 – to the tune of $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its expenses by raising your premiums and call it a day. 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 $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 accountable), you'll typically get $500 back, depending on your state laws.
Moreover, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as criminal law defense attorney Hillsboro OR, pursue subrogation and wins, it will recover your expenses in addition to its own.
All insurance companies are not the same. When comparing, it's worth scrutinizing the records of competing agencies to find out whether they pursue winnable subrogation claims; if they do so fast; if they keep their clients advised as the case continues; and if they then process successfully won reimbursements right away so that you can get your funding 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 profitability by raising your premiums, you'll feel the sting later.