The Things You Need to Know About Subrogation <br/> <br/>

Subrogation is a term that's understood among legal and insurance firms but rarely by the people who employ them. Even if you've never heard the word before, it would be to your advantage to comprehend an overview of the process. The more you know, the more likely it is that an insurance lawsuit will work out in your favor.

Any insurance policy you own is a commitment that, if something bad happens to you, the firm on the other end of the policy will make good in a timely fashion. If your vehicle is rear-ended, insurance adjusters (and police, when necessary) decide who was at fault and that party's insurance pays out.

But since figuring out who is financially responsible for services or repairs is regularly a time-consuming affair – and delay in some cases compounds the damage to the victim – insurance firms in many cases opt to pay up front and figure out the blame after the fact. They then need a way to regain the costs if, when all is said and done, they weren't responsible for the payout.

Let's Look at an Example

Your garage catches fire and causes $10,000 in house damages. Fortunately, you have property insurance and it pays out your claim in full. However, in its investigation it discovers that an electrician had installed some faulty wiring, and there is a decent chance that a judge would find him accountable for the damages. The home has already been repaired in the name of expediency, but your insurance agency is out ten grand. What does the agency do next?

How Does Subrogation Work?

This is where subrogation comes in. It is the way that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. Some companies 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 to your self or property. But under subrogation law, your insurance company is extended some of your rights for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.

Why Does This Matter to Me?

For a start, if you have a deductible, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to the tune of $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its expenses by upping your premiums. On the other hand, if it knows which cases it is owed and pursues them enthusiastically, it is doing you a favor as well as itself. 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 culpable), you'll typically get half your deductible back, depending on your state laws.

Additionally, if the total price 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 Automobile Accident Attorney Sumner, pursue subrogation and succeeds, it will recover your costs in addition to its own.

All insurers are not the same. When shopping around, it's worth researching the records of competing companies to find out if they pursue winnable subrogation claims; if they resolve those claims without delay; if they keep their policyholders posted as the case proceeds; and if they then process successfully won reimbursements quickly so that you can get your funding back and move on with your life. If, instead, an insurance agency has a reputation of honoring claims that aren't its responsibility and then protecting its income by raising your premiums, even attractive rates won't outweigh the eventual headache.