Subrogation is a concept that's well-known in legal and insurance circles but sometimes not by the people they represent. Even if you've never heard the word before, it would be in your self-interest to understand an overview of the process. The more knowledgeable you are about it, the better decisions you can make with regard to your insurance company.
Every insurance policy you have is an assurance that, if something bad occurs, the insurer of the policy will make good in one way or another in a timely fashion. If you get an injury while you're on the clock, your company's workers compensation pays out 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 often a heavily involved affair – and time spent waiting sometimes adds to the damage to the policyholder – insurance companies in many cases opt to pay up front and figure out the blame afterward. They then need a path to regain the costs if, once the situation is fully assessed, they weren't responsible for the expense.
For Example
You are in a traffic-light accident. Another car ran into yours. Police are called, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was to blame and her insurance policy should have paid for the repair of your auto. How does your company get its funds back?
How Subrogation Works
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 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 done to your person or property. But under subrogation law, your insurance company is given some of your rights in exchange 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 Should I Care?
For a start, if you have a deductible, it wasn't just your insurance company that 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 insurance company is timid on any subrogation case it might not win, it might opt to recoup its costs by boosting your premiums. On the other hand, if it knows which cases it is owed and pursues those cases enthusiastically, it is acting both in its own interests and in yours. If all $10,000 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 at fault), you'll typically get $500 back, depending on your state laws.
Furthermore, if the total loss of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely spendy. If your insurance company or its property damage lawyers, such as custody attorney Springville ut, pursue subrogation and succeeds, it will recover your expenses as well as its own.
All insurance companies are not created equal. When shopping around, it's worth comparing the reputations of competing agencies to determine whether they pursue legitimate subrogation claims; if they resolve those claims with some expediency; if they keep their account holders 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, on the other hand, an insurance firm has a record of paying out claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.