Subrogation is a term that's understood among legal and insurance firms but sometimes not by the policyholders they represent. Rather than leave it to the professionals, it is in your benefit to comprehend the steps of the process. The more knowledgeable you are, the better decisions you can make about your insurance company.

Any insurance policy you own is a promise that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another in a timely fashion. If you get injured at work, your employer's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially responsible for services or repairs is usually a heavily involved affair – and delay sometimes increases the damage to the policyholder – insurance firms often decide to pay up front and figure out the blame afterward. They then need a method to recoup the costs if, when there is time to look at all the facts, they weren't in charge of the payout.

Let's Look at an Example

You are in a traffic-light accident. Another car ran into yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was to blame and his insurance should have paid for the repair of your car. How does your insurance company get its money back?

How Does Subrogation Work?

This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement 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. Normally, only you can sue for damages done to your self or property. But under subrogation law, your insurer is considered to have some of your rights 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.

How Does This Affect Me?

For a start, 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 choose to get back its losses by increasing your premiums and call it a day. On the other hand, if it has a proficient 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 50 percent accountable), you'll typically get $500 back, based on the laws in most states.

Additionally, if the total price 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 law firm Sandy Ut, pursue subrogation and succeeds, it will recover your costs in addition to its own.

All insurance agencies are not created equal. When shopping around, it's worth comparing the records of competing companies to determine if they pursue valid subrogation claims; if they do so fast; if they keep their account holders informed as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, instead, an insurance firm has a record of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you should keep looking.

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.

Subrogation is a concept that's well-known in legal and insurance circles but rarely by the customers they represent. If this term has come up when dealing with your insurance agent or a legal proceeding, it is in your self-interest to understand the nuances of how it works. The more knowledgeable you are, the better decisions you can make about your insurance policy.

Every insurance policy you hold is an assurance that, if something bad happens to you, the business that insures the policy will make restitutions in a timely fashion. If you get hurt while you're on the clock, your employer's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially responsible for services or repairs is sometimes a tedious, lengthy affair – and delay sometimes compounds the damage to the policyholder – insurance companies in many cases opt to pay up front and figure out the blame afterward. They then need a mechanism to recover the costs if, once the situation is fully assessed, they weren't in charge of the payout.

Let's Look at an Example

You head to the emergency room with a sliced-open finger. You give the receptionist your health insurance card and he takes down your coverage details. You get stitched up and your insurer gets an invoice for the tab. But on the following day, when you get to work – where the injury occurred – your boss hands you workers compensation forms to turn in. Your employer's workers comp policy is actually responsible for the costs, not your health insurance. The latter has a right to recover its costs somehow.

How Subrogation Works

This is where subrogation comes in. It is the method that an insurance company uses to claim reimbursement 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 person 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.

Why Do I Need to Know This?

For starters, if you have a deductible, your insurer wasn't the only one who 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 insurance company is timid on any subrogation case it might not win, it might choose to recover its costs by upping your premiums. On the other hand, if it knows which cases it is owed and goes after those cases efficiently, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent at fault), you'll typically get $500 back, depending on your state laws.

Moreover, if the total price of an accident is over 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 as well as its own.

All insurers are not the same. When comparing, it's worth contrasting the records of competing companies to evaluate whether they pursue valid subrogation claims; if they resolve those claims without delay; if they keep their customers apprised as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your deductible 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 covering its income by raising your premiums, even attractive rates won't outweigh the eventual headache.