Subrogation is a concept that's understood in legal and insurance circles but rarely by the customers who employ them. Rather than leave it to the professionals, it is in your self-interest to understand an overview of the process. The more knowledgeable you are, the more likely an insurance lawsuit will work out in your favor.
Every insurance policy you have is a promise that, if something bad occurs, the insurer of the policy will make restitutions in a timely fashion. If your vehicle is rear-ended, insurance adjusters (and the courts, when necessary) determine who was at fault and that party's insurance covers the damages.
But since ascertaining who is financially responsible for services or repairs is typically a confusing affair aa‚¬" and time spent waiting in some cases increases the damage to the policyholder aa‚¬" insurance companies often opt to pay up front and assign blame later. They then need a method to recover the costs if, ultimately, they weren't in charge of the payout.
Can You Give an Example?
Your bedroom catches fire and causes $10,000 in home damages. Fortunately, you have property insurance and it takes care of the repair expenses. However, the assessor assigned to your case discovers that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him responsible for the damages. The house has already been fixed up in the name of expediency, but your insurance company is out $10,000. What does the company do next?
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. 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 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 a start, if your insurance policy stipulated 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 aa‚¬" namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its costs by increasing your premiums and call it a day. On the other hand, if it has a proficient legal team and goes after them enthusiastically, it is acting both in its own interests and in yours. If all 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, 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, which can be extremely expensive. If your insurance company or its property damage lawyers, such as worker competition terms Milton GA, successfully press a subrogation case, it will recover your costs in addition to its own.
All insurers are not the same. When comparing, it's worth scrutinizing the reputations of competing agencies to determine whether they pursue valid subrogation claims; if they do so with some expediency; if they keep their clients updated as the case proceeds; 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, on the other hand, an insurance firm has a record of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.