Subrogation is a concept that's well-known among legal and insurance companies but rarely by the customers they represent. Even if you've never heard the word before, it would be in your benefit to comprehend the steps of the process. The more you know, the more likely it is that relevant proceedings will work out favorably.
Any insurance policy you hold is an assurance that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another in a timely fashion. If your house is broken into, for example, your property insurance steps in to remunerate you or pay for the repairs, subject to state property damage laws.
But since determining who is financially accountable for services or repairs is often a time-consuming affair – and delay sometimes compounds the damage to the victim – insurance companies in many cases opt to pay up front and assign blame afterward. They then need a means to get back the costs if, when all the facts are laid out, they weren't responsible for the payout.
Can You Give an Example?
Your garage catches fire and causes $10,000 in house damages. Luckily, you have property insurance and it pays out your claim in full. However, in its investigation it discovers that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him accountable for the damages. You already have your money, but your insurance firm is out all that money. What does the firm do next?
How Subrogation Works
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 insurance firms 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 self or property. But under subrogation law, your insurer is considered to have some of your rights for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
How Does This Affect Individuals?
For a start, 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 – namely, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to get back its losses by ballooning your premiums. On the other hand, if it has a proficient legal team and goes after those cases enthusiastically, it is doing you a favor as well as itself. If all ten grand is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get $500 back, depending on the laws in your state.
Additionally, if the total price 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 car accident attorney Norcross GA, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurance agencies are not the same. When comparing, it's worth scrutinizing the reputations of competing firms to evaluate whether they pursue legitimate subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their accountholders posted 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 honoring claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you should keep looking.