Subrogation is an idea that's well-known in insurance and legal circles but sometimes not by the people they represent. If this term has come up when dealing with your insurance agent or a legal proceeding, it would be in your benefit to know an overview of how it works. The more you know about it, the better decisions you can make about your insurance policy.
Any insurance policy you hold is an assurance that, if something bad occurs, the company on the other end of the policy will make good in a timely manner. If you get hurt at work, your employer'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 often a tedious, lengthy affair – and delay often increases the damage to the policyholder – insurance companies in many cases decide to pay up front and assign blame afterward. They then need a means to recoup the costs if, when there is time to look at all the facts, they weren't in charge of the expense.
For Example
You rush into the emergency room with a gouged finger. You hand the nurse your medical insurance card and he records your coverage information. You get taken care of and your insurance company gets an invoice for the expenses. But the next afternoon, when you get to work – where the injury occurred – you are given workers compensation paperwork to fill out. Your company's workers comp policy is in fact responsible for the hospital trip, not your medical insurance policy. It has a vested interest in getting that money back in some way.
How Subrogation Works
This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement 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. Normally, only you can sue for damages to your person or property. But under subrogation law, your insurance company is extended some of your rights for making good on 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 one thing, if your insurance policy stipulated a deductible, your insurance company wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurance company is timid on any subrogation case it might not win, it might choose to recoup its losses by ballooning your premiums. On the other hand, if it knows which cases it is owed and goes after them enthusiastically, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get $500 back, based on the laws in most states.
Moreover, 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 Accident Attorney Smyrna GA, pursue subrogation and wins, it will recover your expenses as well as its own.
All insurers are not created equal. When comparing, it's worth weighing the records of competing firms to determine if they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their accountholders updated as the case goes on; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, on the other hand, an insurance company has a reputation of paying out claims that aren't its responsibility and then covering its income by raising your premiums, you should keep looking.
Car Accident Attorney Smyrna GA