Subrogation is an idea that's understood among insurance and legal firms but rarely by the customers who hire them. Even if you've never heard the word before, it would be to your advantage to know the steps of the process. The more knowledgeable you are, the more likely it is that relevant proceedings will work out in your favor.
Any insurance policy you have is a commitment that, if something bad occurs, the company that covers the policy will make restitutions in one way or another without unreasonable delay. If you get injured on the job, for example, your employer's workers compensation insurance 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 delay sometimes compounds the damage to the victim – insurance firms in many cases decide to pay up front and figure out the blame afterward. They then need a way to regain the costs if, ultimately, they weren't actually in charge of the expense.
Let's Look at an Example
You head to the Instacare with a deeply cut finger. You give the receptionist your health insurance card and she writes down your coverage details. You get taken care of and your insurance company is billed for the medical care. But on the following day, when you arrive at work – where the injury happened – your boss hands you workers compensation forms to fill out. Your workers comp policy is in fact responsible for the hospital visit, not your health insurance company. The latter has an interest in recovering its costs in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement 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. Ordinarily, 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 having taken care of the damages. It can go after the money that was originally due to you, because it has covered the amount already.
Why Do I Need to Know This?
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 – namely, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt 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 pursues them aggressively, it is doing you a favor as well as itself. 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 half your deductible back, depending on the laws in your state.
In addition, if the total loss 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 social security disability lawyers paddock lake wi, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not created equal. When comparing, it's worth looking at the reputations of competing agencies to evaluate whether they pursue legitimate subrogation claims; if they do so fast; if they keep their customers updated as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, instead, an insurer has a record of paying out claims that aren't its responsibility and then protecting its profitability by raising your premiums, you'll feel the sting later.
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