Subrogation is a term that's well-known among insurance and legal firms but often not by the people they represent. Rather than leave it to the professionals, it would be in your benefit to know an overview of the process. The more you know, the more likely relevant proceedings will work out favorably.
An insurance policy you have is a commitment that, if something bad occurs, the insurer of the policy will make good in one way or another without unreasonable delay. If your vehicle is rear-ended, insurance adjusters (and police, when necessary) determine who was at fault and that person's insurance pays out.
But since figuring out who is financially accountable for services or repairs is regularly a tedious, lengthy affair – and delay often increases the damage to the policyholder – insurance companies often opt to pay up front and assign blame later. They then need a path to regain the costs if, when all the facts are laid out, they weren't in charge of the payout.
You rush into the hospital with a gouged finger. You give the nurse your health insurance card and he takes down your coverage details. You get taken care of and your insurance company gets an invoice for the expenses. But the next afternoon, when you clock in at your workplace – where the accident happened – you are given workers compensation forms to file. Your workers comp policy is in fact responsible for the invoice, not your health insurance policy. It has a vested interest in getting that money back somehow.
How Does Subrogation Work?
This is where subrogation comes in. It is the process that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. Some companies 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 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 originally due to you, because it has covered the amount already.
How Does This Affect Me?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurance company who 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 timid on any subrogation case it might not win, it might opt to recover its losses by raising your premiums and call it a day. On the other hand, if it has a competent legal team and goes after them aggressively, it is doing you a favor as well as itself. If all ten grand 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 at fault), you'll typically get half your deductible back, based on the laws in most states.
Furthermore, 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 divorce attorney olympia wa, pursue subrogation and succeeds, it will recover your expenses as well as its own.
All insurance companies are not created equal. When shopping around, it's worth looking at the records of competing firms to evaluate if they pursue valid subrogation claims; if they resolve those claims with some expediency; if they keep their customers updated as the case goes on; and if they then process successfully won reimbursements quickly 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 covering its income by raising your premiums, even attractive rates won't outweigh the eventual headache.