What Every Policy holder Ought to Know About Subrogation

Subrogation is an idea that's understood in insurance and legal circles but rarely by the customers who hire them. Even if you've never heard the word before, it would be in your benefit to understand the nuances of how it works. The more you know, the better decisions you can make with regard to your insurance company.

Any insurance policy you own is an assurance that, if something bad occurs, the insurer of the policy will make restitutions without unreasonable delay. If you get an injury while you're on the clock, for instance, your company's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially accountable for services or repairs is regularly a tedious, lengthy affair – and time spent waiting in some cases adds to the damage to the victim – insurance companies usually opt to pay up front and figure out the blame afterward. They then need a method to recover the costs if, when all is said and done, they weren't actually responsible for the payout.

For Example

You arrive at the Instacare with a deeply cut finger. You hand the receptionist your medical insurance card and she writes down your policy information. You get stitches and your insurer gets a bill for the expenses. But the next morning, when you get to work – where the injury happened – you are given workers compensation forms to turn in. Your company's workers comp policy is actually responsible for the invoice, not your medical insurance policy. It has a vested interest in getting that money back in some way.

How Subrogation Works

This is where subrogation comes in. It is the method 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. Usually, only you can sue for damages done to your self or property. But under subrogation law, your insurer is extended 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 Me?

For one thing, if your insurance policy stipulated a deductible, your insurer wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its losses by increasing your premiums. On the other hand, if it knows which cases it is owed and goes after those cases efficiently, it is acting both in its own interests and in yours. If all of the money 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 culpable), you'll typically get $500 back, based on the laws in most states.

Furthermore, if the total cost 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 immigration attorney near me Sandy Ut, pursue subrogation and succeeds, it will recover your expenses in addition to its own.

All insurance companies are not the same. When comparing, it's worth looking at the records of competing firms to evaluate if they pursue legitimate subrogation claims; if they do so with some expediency; if they keep their customers informed as the case continues; and if they then process successfully won reimbursements right away so that you can get your money back and move on with your life. If, instead, an insurer has a reputation of paying out claims that aren't its responsibility and then covering its income by raising your premiums, even attractive rates won't outweigh the eventual headache.