Subrogation is a concept that's understood among legal and insurance companies but rarely by the people they represent. Even if it sounds complicated, it would be in your benefit to comprehend the nuances of how it works. The more you know, the more likely an insurance lawsuit will work out in your favor.
Any insurance policy you hold is an assurance that, if something bad happens to you, the firm that insures the policy will make good in one way or another without unreasonable delay. If you get injured while working, your employer's workers compensation insurance picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially accountable for services or repairs is typically a tedious, lengthy affair – and time spent waiting in some cases compounds the damage to the policyholder – insurance firms often decide to pay up front and assign blame later. They then need a means to recoup the costs if, once the situation is fully assessed, they weren't actually responsible for the payout.
You go to the hospital with a sliced-open finger. You hand the receptionist your medical insurance card and he records your plan information. You get stitched up and your insurer is billed for the services. But the next afternoon, when you get to your workplace – where the injury happened – you are given workers compensation paperwork to file. Your workers comp policy is actually responsible for the payout, not your medical insurance policy. The latter has an interest in recovering its costs somehow.
How Does Subrogation Work?
This is where subrogation comes in. It is the way that an insurance company uses to claim payment 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. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurer is extended some of your rights 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 Do I Need to Know This?
For starters, if your insurance policy stipulated a deductible, it wasn't just your insurer that 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 timid on any subrogation case it might not win, it might choose to recoup its losses by increasing your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after those cases aggressively, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get $500 back, based on the laws in most states.
Additionally, if the total loss of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as criminal defense lawyer near me, pursue subrogation and wins, it will recover your costs as well as its own.
All insurers are not the same. When shopping around, it's worth examining the reputations of competing firms to evaluate if they pursue winnable subrogation claims; if they do so quickly; if they keep their policyholders informed as the case proceeds; 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 insurer has a reputation of paying out claims that aren't its responsibility and then covering its profit margin by raising your premiums, you should keep looking.