Subrogation is a concept that's well-known in insurance and legal circles but sometimes not by the policyholders they represent. Rather than leave it to the professionals, it would be to your advantage to comprehend the steps of how it works. The more you know about it, the more likely it is that relevant proceedings will work out favorably.
Every insurance policy you own is a promise that, if something bad happens to you, the firm that insures the policy will make good in one way or another in a timely fashion. If your vehicle is hit, insurance adjusters (and the judicial system, when necessary) decide who was to blame and that person's insurance covers the damages.
But since determining who is financially responsible for services or repairs is usually a tedious, lengthy affair – and time spent waiting often compounds the damage to the policyholder – insurance companies often decide to pay up front and assign blame after the fact. They then need a method to recoup the costs if, once the situation is fully assessed, they weren't responsible for the expense.
You are in a vehicle accident. Another car ran into yours. Police are called, you exchange insurance information, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later police tell the insurance companies that the other driver was entirely to blame and his insurance should have paid for the repair of your car. How does your insurance company get its money back?
How Subrogation Works
This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Under ordinary circumstances, only you can sue for damages done to your self or property. But under subrogation law, your insurer is given 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.
How Does This Affect the Insured?
For one thing, if you have a deductible, it wasn't just your insurer who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to the tune of $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to recoup its costs by boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues those cases enthusiastically, 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 50 percent responsible), you'll typically get $500 back, depending on your state laws.
Moreover, if the total loss of an accident is more than your maximum coverage amount, you may have had to pay the difference, which can be extremely spendy. If your insurance company or its property damage lawyers, such as workers comp lawyer Milton, ga, pursue subrogation and wins, it will recover your losses as well as its own.
All insurers are not created equal. When comparing, it's worth comparing the reputations of competing firms to evaluate whether they pursue valid subrogation claims; if they do so fast; if they keep their clients apprised as the case continues; and if they then process successfully won reimbursements immediately so that you can get your funding 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 protecting its income by raising your premiums, even attractive rates won't outweigh the eventual headache.