Subrogation is a term that's well-known among insurance and legal companies but rarely by the customers who hire them. Rather than leave it to the professionals, it is in your self-interest to understand the steps of the process. The more you know, the more likely an insurance lawsuit will work out favorably.

An insurance policy you hold is a promise that, if something bad happens to you, the company that covers the policy will make restitutions in a timely fashion. If you get injured on the job, for example, your company'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 accountable for services or repairs is typically a tedious, lengthy affair – and time spent waiting in some cases adds to the damage to the victim – insurance firms often opt to pay up front and figure out the blame after the fact. They then need a means to get back the costs if, ultimately, they weren't in charge of the payout.

For Example

Your stove 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 responsible for the damages. You already have your money, but your insurance agency is out ten grand. 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 payment when it pays out a claim that turned out not to be its responsibility. 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 done to your self or property. But under subrogation law, your insurance company is given 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.

How Does This Affect the Insured?

For a start, 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 have a stake in the outcome as well – namely, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might choose to get back its expenses by raising your premiums and call it a day. 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 is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent at fault), you'll typically get $500 back, based on the laws in most states.

Furthermore, if the total loss of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as Auto Accident Lawyer in Marietta, Ga, pursue subrogation and succeeds, it will recover your costs as well as its own.

All insurers are not the same. When comparing, it's worth contrasting the reputations of competing companies to evaluate if they pursue valid subrogation claims; if they resolve those claims with some expediency; if they keep their accountholders posted as the case goes on; and if they then process successfully won reimbursements right away so that you can get your losses back and move on with your life. If, instead, an insurer has a reputation of paying out claims that aren't its responsibility and then covering its profit margin by raising your premiums, you'll feel the sting later.

Subrogation is an idea that's understood among insurance and legal companies but rarely by the customers who hire them. Even if it sounds complicated, it is to your advantage to understand the nuances of how it works. The more information you have, the more likely relevant proceedings will work out in your favor.

Any insurance policy you hold is a promise that, if something bad happens to you, the firm on the other end of the policy will make good without unreasonable delay. If your home is robbed, your property insurance steps in to compensate you or pay for the repairs, subject to state property damage laws.

But since determining who is financially accountable for services or repairs is regularly a time-consuming affair – and delay often increases the damage to the victim – insurance firms in many cases opt to pay up front and assign blame afterward. They then need a means to recover the costs if, when all is said and done, they weren't actually responsible for the payout.

For Example

You are in a highway accident. Another car ran into yours. The police show up to assess the situation, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later police tell the insurance companies that the other driver was at fault and his insurance should have paid for the repair of your auto. How does your company get its funds back?

How Does Subrogation Work?

This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement when it pays out a claim that turned out not to be its responsibility. Some companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurer is considered to have 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.

Why Does This Matter to Me?

For starters, if your insurance policy stipulated a deductible, your insurer wasn't the only one that 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 losses by upping your premiums. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is doing you a favor as well as itself. If all ten grand is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get half your deductible back, depending on your state laws.

Moreover, if the total price 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 attorneys that specialize in auto accidents Powder Springs GA, successfully press a subrogation case, it will recover your expenses in addition to its own.

All insurers are not the same. When shopping around, it's worth examining the records of competing companies to evaluate whether they pursue legitimate subrogation claims; if they resolve those claims without dragging their feet; 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 deductible back and move on with your life. If, on the other hand, an insurer has a reputation of paying out claims that aren't its responsibility and then covering its profitability by raising your premiums, you should keep looking.

attorneys that specialize in auto accidents Powder Springs GA