Subrogation and How It Affects YouSubrogation is an idea that's wellknown in insurance and legal circles but rarely by the customers who employ them. Even if it sounds complicated it would be in your selfinterest to comprehend the nuances of how it works. The more you know the better decisions you can make with regard to your insurance company.

Any insurance policy you have is a commitment that, if something bad occurs, the firm that insures the policy will make good in one way or another in a timely manner. If you get an injury while you're on the clock, for instance, your employer's workers compensation insurance agrees to pay 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 time spent waiting sometimes adds to the damage to the policyholder – insurance firms usually opt to pay up front and figure out the blame after the fact. They then need a path to regain the costs if, when all is said and done, they weren't actually in charge of the expense.

For Example

Your bedroom catches fire and causes $10,000 in home damages. Happily, you have property insurance and it pays out your claim in full. However, the insurance investigator discovers that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him accountable for the damages. You already have your money, but your insurance company is out all that money. What does the company do next?

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 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 self 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 starters, if your insurance policy stipulated a deductible, it wasn't just your insurance company 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 lax about bringing subrogation cases to court, it might choose to recover its losses by raising your premiums and call it a day. On the other hand, if it has a proficient legal team and goes after those cases efficiently, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get half your deductible back, based on the laws in most states.

Furthermore, if the total expense 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 lawyer Hillsboro OR, pursue subrogation and succeeds, it will recover your costs in addition to its own.

All insurance agencies are not the same. When shopping around, it's worth weighing the reputations of competing companies to find out if they pursue valid subrogation claims; if they do so without delay; if they keep their accountholders advised as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your money back and move on with your life. If, instead, 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.

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