Subrogation is an idea 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 to your advantage to understand the steps of the process. The more information you have about it, the more likely relevant proceedings will work out favorably.
An insurance policy you hold is an assurance that, if something bad happens to you, the insurer of the policy will make good in one way or another in a timely manner. If a windstorm damages your home, your property insurance agrees to pay you or pay for the repairs, subject to state property damage laws.
But since figuring out who is financially responsible for services or repairs is typically a heavily involved affair – and time spent waiting in some cases adds to the damage to the policyholder – insurance companies often opt to pay up front and assign blame later. They then need a path to regain the costs if, when all is said and done, they weren't in charge of the expense.
Can You Give an Example?
You are in a car accident. Another car crashed 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 to blame and his insurance should have paid for the repair of your car. How does your company get its money back?
How Subrogation Works
This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement when it pays out a claim that turned out not to be its responsibility. 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. Usually, only you can sue for damages to your self or property. But under subrogation law, your insurance company is considered to have 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 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 – to be precise, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might choose to get back its expenses by boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues those cases enthusiastically, 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 one-half to blame), you'll typically get half your deductible back, based on the laws in most states.
Additionally, if the total price 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 truck accident lawyers Dunwoody ga, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance companies are not the same. When comparing, it's worth looking up the records of competing firms to find out whether they pursue valid subrogation claims; if they resolve those claims without delay; if they keep their accountholders apprised as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your losses 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, even attractive rates won't outweigh the eventual headache.