Subrogation is an idea that's well-known among insurance and legal professionals but rarely by the policyholders they represent. Even if you've never heard the word before, it would be in your self-interest to know the steps of the process. The more you know, the better decisions you can make with regard to your insurance policy.
Every insurance policy you have is a promise that, if something bad happens to you, the firm that covers the policy will make good in one way or another without unreasonable delay. If you get hurt on the job, 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 ascertaining who is financially accountable for services or repairs is often a confusing affair – and delay in some cases increases the damage to the policyholder – insurance companies usually decide to pay up front and assign blame later. They then need a mechanism to regain the costs if, once the situation is fully assessed, they weren't actually responsible for the expense.
Let's Look at an Example
You arrive at the hospital with a gouged finger. You hand the receptionist your medical insurance card and she writes down your plan information. You get taken care of and your insurer gets an invoice for the tab. But the next afternoon, when you arrive at your place of employment – where the injury occurred – you are given workers compensation forms to fill out. Your employer's workers comp policy is in fact responsible for the hospital trip, not your medical insurance. The latter has an interest in recovering its costs somehow.
How Does Subrogation Work?
This is where subrogation comes in. It is the process that an insurance company uses to claim payment 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. Under ordinary circumstances, only you can sue for damages to your self or property. But under subrogation law, your insurer is given 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 a start, if your insurance policy stipulated a deductible, your insurer wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its costs by upping 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 doing you a favor as well as itself. 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 to blame), you'll typically get $500 back, based on the laws in most states.
Furthermore, if the total cost 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 car injury lawyer Milton, ga, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance companies are not the same. When shopping around, it's worth looking up the records of competing agencies to evaluate whether they pursue legitimate subrogation claims; if they do so in a reasonable amount of time; if they keep their customers informed as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your funding 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 bottom line by raising your premiums, you'll feel the sting later.