Subrogation is an idea that's understood among legal and insurance professionals but sometimes not by the customers who hire them. Even if you've never heard the word before, it would be in your self-interest to comprehend an overview of the process. The more information you have about it, the better decisions you can make with regard to your insurance policy.
An insurance policy you own is a commitment that, if something bad occurs, the company on the other end of the policy will make restitutions without unreasonable delay. If you get hurt at work, for instance, your employer's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially responsible for services or repairs is typically a heavily involved affair – and delay often compounds the damage to the victim – insurance firms usually opt to pay up front and figure out the blame later. They then need a means to recoup the costs if, in the end, they weren't responsible for the expense.
Your living room catches fire and causes $10,000 in house damages. Fortunately, you have property insurance and it pays out your claim in full. However, the assessor assigned to your case discovers that an electrician had installed some faulty wiring, and there is a decent chance that a judge would find him responsible for the loss. The house has already been repaired in the name of expediency, but your insurance firm is out all that money. What does the firm 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 insurance firms 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 done to your self or property. But under subrogation law, your insurance company is extended 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 Should I Care?
For one thing, if your insurance policy stipulated 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 have a stake in the outcome as well – to be precise, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its losses by upping your premiums. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all ten grand is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get $500 back, based on the laws in most states.
In addition, 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 divorce attorney olympia wa, successfully press a subrogation case, it will recover your losses in addition to its own.
All insurers are not the same. When comparing, it's worth comparing the reputations of competing firms to find out if they pursue winnable subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their clients informed as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your losses back and move on with your life. If, on the other hand, an insurance agency has a record of paying out claims that aren't its responsibility and then safeguarding its profit margin by raising your premiums, you should keep looking.