Subrogation is an idea that's understood among legal and insurance professionals but sometimes not by the policyholders they represent. Even if it sounds complicated, it would be in your self-interest to comprehend the steps of how it works. The more knowledgeable you are about it, the better decisions you can make with regard to your insurance policy.
Any insurance policy you hold is a commitment that, if something bad occurs, the business on the other end of the policy will make good in one way or another in a timely fashion. If you get injured while working, your employer's workers compensation picks up the tab 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 often a tedious, lengthy affair – and time spent waiting often adds to the damage to the policyholder – insurance firms often opt to pay up front and figure out the blame afterward. They then need a way to get back the costs if, when all the facts are laid out, they weren't actually in charge of the expense.
Can You Give an Example?
You arrive at the emergency room with a sliced-open finger. You give the nurse your health insurance card and he writes down your policy details. You get stitched up and your insurance company gets an invoice for the medical care. But on the following day, when you get to your workplace – where the accident happened – your boss hands you workers compensation forms to turn in. Your company's workers comp policy is actually responsible for the payout, not your health insurance policy. It has a vested interest in getting that money back somehow.
How Does Subrogation Work?
This is where subrogation comes in. It is the way 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. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurance company 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.
Why Should I Care?
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 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 upping your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after them efficiently, it is acting both in its own interests and in yours. 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 responsible), you'll typically get half your deductible back, based on the laws in most states.
Furthermore, if the total cost 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 workers comp attorney Austell GA, pursue subrogation and wins, it will recover your costs as well as its own.
All insurance agencies are not the same. When shopping around, it's worth weighing the records of competing agencies to find out whether they pursue legitimate subrogation claims; if they do so fast; if they keep their accountholders updated 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 insurance firm has a record of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.