What You Need to Know About Subrogation
- 10 20, 2020
- |Personal Injury Attorney
- No Comments
Subrogation is an idea that's well-known in legal and insurance circles but sometimes not by the policyholders they represent. Even if it sounds complicated, it would be in your benefit to comprehend an overview of how it works. The more knowledgeable you are about it, the more likely relevant proceedings will work out in your favor.
Every insurance policy you have is an assurance that, if something bad occurs, the insurer of the policy will make restitutions in one way or another in a timely manner. If you get an injury at work, your employer's workers compensation 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 time-consuming affair – and time spent waiting often adds to the damage to the policyholder – insurance firms usually decide to pay up front and figure out the blame later. They then need a way to recoup the costs if, when there is time to look at all the facts, they weren't actually in charge of the expense.
For Example
You are in a vehicle 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 that pays for the repairs right away. Later it's determined that the other driver was entirely at fault and her insurance policy 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 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. 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 in exchange 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 Me?
For one thing, if your insurance policy stipulated a deductible, your insurer wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to the tune of $1,000. If your insurer is lax about bringing subrogation cases to court, it might choose to get back its losses by upping your premiums and call it a day. On the other hand, if it has a capable legal team and goes after them efficiently, it is doing you a favor as well as itself. If all is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total cost of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely expensive. If your insurance company or its property damage lawyers, such as Personal injury law firm Puyallup Wa, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurance agencies are not the same. When shopping around, it's worth looking up the records of competing companies to evaluate if they pursue valid subrogation claims; if they do so with some expediency; if they keep their accountholders apprised as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your funding 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 income by raising your premiums, you'll feel the sting later.