Subrogation is a term that's well-known in legal and insurance circles but sometimes not by the policyholders who hire them. Even if you've never heard the word before, it is in your benefit to know the steps of the process. The more information you have, the more likely an insurance lawsuit will work out favorably.
An insurance policy you have is a commitment that, if something bad happens to you, the company on the other end of the policy will make good in a timely manner. If you get injured at work, your company's workers compensation insurance pays out 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 sometimes a heavily involved affair – and time spent waiting sometimes adds to the damage to the victim – insurance firms in many cases opt to pay up front and figure out the blame after the fact. They then need a way to get back the costs if, when there is time to look at all the facts, they weren't in charge of the payout.
For Example
You rush into the doctor's office with a gouged finger. You hand the receptionist your health insurance card and he takes down your coverage information. You get taken care of and your insurance company is billed for the medical care. But the next morning, when you arrive at your place of employment – where the injury happened – your boss hands you workers compensation paperwork to fill out. Your employer's workers comp policy is in fact responsible for the invoice, not your health 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 method that an insurance company uses to claim reimbursement 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. Under ordinary circumstances, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is considered to have 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 Do I Need to Know This?
For a start, if you have a deductible, it wasn't just your insurance company who 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 recover its expenses by ballooning your premiums. On the other hand, if it has a competent legal team and pursues them 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 accountable), you'll typically get $500 back, based on the laws in most states.
Furthermore, if the total loss of an accident is more than your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as employment lawyer university place wa, pursue subrogation and succeeds, it will recover your expenses in addition to its own.
All insurance companies are not created equal. When comparing, it's worth looking up the records of competing agencies to determine if they pursue legitimate subrogation claims; if they resolve those claims without delay; if they keep their policyholders advised as the case goes on; 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 covering its profitability by raising your premiums, you should keep looking.