Subrogation is a term that's understood among legal and insurance companies but sometimes not by the customers they represent. Rather than leave it to the professionals, it is in your self-interest to comprehend an overview of the process. The more information you have, the better decisions you can make with regard to your insurance policy.
Every insurance policy you own is a commitment that, if something bad occurs, the company on the other end of 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 judicial system, when necessary) determine who was to blame and that party's insurance covers the damages.
But since ascertaining who is financially responsible for services or repairs is usually a time-consuming affair – and delay in some cases adds to the damage to the victim – insurance firms usually opt to pay up front and figure out the blame afterward. They then need a path to regain the costs if, when all is said and done, they weren't in charge of the payout.
Let's Look at an Example
Your electric outlet catches fire and causes $10,000 in house damages. Fortunately, you have property insurance and it pays out your claim in full. However, in its investigation it finds out that an electrician had installed some faulty wiring, and there is a reasonable possibility that a judge would find him accountable for the loss. The house has already been fixed up in the name of expediency, but your insurance agency is out all that money. What does the agency do next?
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. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurer is extended some of your rights in exchange 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.
Why Should I Care?
For starters, if your insurance policy stipulated a deductible, it wasn't just your insurer who 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 insurer is unconcerned with pursuing subrogation even when it is entitled, it might choose to get back its losses by boosting your premiums. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is acting both in its own interests and in yours. 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, depending on the laws in your state.
In addition, if the total expense 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 probate attorney whitewater wi, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance agencies are not the same. When comparing, it's worth looking at the reputations of competing agencies to find out whether they pursue valid subrogation claims; if they do so with some expediency; if they keep their clients posted as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your losses 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 covering its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.probate attorney whitewater wi