Subrogation is a concept that's well-known in insurance and legal circles but often not by the policyholders they represent. Even if you've never heard the word before, it would be in your benefit to know the nuances 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 hold is a promise that, if something bad occurs, the company on the other end of the policy will make restitutions in one way or another without unreasonable delay. If your home suffers fire damage, for example, your property insurance steps in to remunerate you or enable the repairs, subject to state property damage laws.
But since figuring out who is financially accountable for services or repairs is sometimes a confusing affair – and delay in some cases compounds the damage to the policyholder – insurance companies often decide to pay up front and assign blame later. They then need a path to recover the costs if, ultimately, they weren't responsible for the expense.
Let's Look at an Example
You are in a car 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 his insurance policy should have paid for the repair of your vehicle. How does your insurance company get its money back?
How Does Subrogation Work?
This is where subrogation comes in. It is the way that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. 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 to your self or property. But under subrogation law, your insurance company is extended some of your rights in exchange 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 the Insured?
For one thing, if you have a deductible, your insurance company wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to be precise, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to recoup its costs by upping your premiums. On the other hand, if it has a knowledgeable legal team and goes after them enthusiastically, it is doing you a favor as well as itself. If all of the money 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 culpable), you'll typically get half your deductible back, based on the laws in most states.
In addition, if the total expense of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as car accident attorney Powder Springs 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 looking up the reputations of competing agencies to determine whether they pursue legitimate subrogation claims; if they do so fast; if they keep their accountholders apprised as the case goes on; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, on the other hand, an insurance agency has a reputation of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you should keep looking.
car accident attorney Powder Springs GA