Subrogation is a concept that's understood in insurance and legal circles but rarely by the people they represent. Even if it sounds complicated, it would be in your self-interest to understand the nuances of the process. The more you know about it, the better decisions you can make about your insurance company.
An insurance policy you have is an assurance that, if something bad occurs, the company on the other end of the policy will make good without unreasonable delay. If your vehicle is hit, insurance adjusters (and police, when necessary) decide who was to blame and that party's insurance covers the damages.
But since ascertaining who is financially accountable for services or repairs is often a tedious, lengthy affair – and time spent waiting in some cases compounds the damage to the victim – insurance companies usually decide to pay up front and figure out the blame afterward. They then need a way to recover the costs if, once the situation is fully assessed, they weren't actually responsible for the payout.
For Example
You go to the emergency room with a gouged finger. You hand the nurse your medical insurance card and she records your plan information. You get stitches and your insurance company gets a bill for the services. But the next day, when you arrive at your workplace – where the accident occurred – you are given workers compensation forms to fill out. Your company's workers comp policy is in fact responsible for the bill, not your medical insurance policy. The latter has an interest in recovering its money somehow.
How Does Subrogation Work?
This is where subrogation comes in. It is the method 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 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 Does This Matter to Me?
For one thing, if your insurance policy stipulated 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 – namely, $1,000. If your insurer is lax about bringing subrogation cases to court, it might choose to recover its costs by boosting your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues those cases enthusiastically, it is acting both in its own interests and in yours. 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 one-half at fault), you'll typically get half your deductible back, depending on the laws in your state.
In addition, if the total expense of an accident is over 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 attorneys that specialize in auto accidents Powder Springs GA, pursue subrogation and wins, it will recover your costs as well as its own.
All insurance agencies are not created equal. When comparing, it's worth examining the records of competing agencies to determine whether they pursue legitimate subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their policyholders informed as the case continues; and if they then process successfully won reimbursements immediately so that you can get your losses back and move on with your life. If, instead, an insurer has a record of honoring claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you should keep looking.
attorneys that specialize in auto accidents Powder Springs GA