Subrogation is a concept that's understood among legal and insurance professionals but sometimes not by the customers who employ them. Even if you've never heard the word before, it would be in your benefit to understand an overview of the process. The more you know, the more likely relevant proceedings will work out in your favor.
An insurance policy you hold is an assurance that, if something bad happens to you, the firm that insures the policy will make restitutions without unreasonable delay. If you get injured 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 determining who is financially responsible for services or repairs is regularly a confusing affair – and time spent waiting in some cases compounds the damage to the victim – insurance companies in many cases decide to pay up front and assign blame later. They then need a method to recover the costs if, when all is said and done, they weren't actually responsible for the expense.
Your kitchen 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 finds out that an electrician had installed some faulty wiring, and there is a decent chance that a judge would find him responsible for the damages. The home 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 Does Subrogation Work?
This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement 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 done to your self or property. But under subrogation law, your insurance company is extended some of your rights in exchange 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 your insurance policy stipulated a deductible, your insurance company wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurer is lax about bringing subrogation cases to court, it might choose to recoup its costs by increasing your premiums and call it a day. 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 $10,000 is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half accountable), you'll typically get $500 back, depending on the laws in your state.
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 fathers custody rights henderson nv, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance agencies are not created equal. When shopping around, it's worth weighing the records of competing agencies to evaluate if they pursue valid subrogation claims; if they resolve those claims without dragging their feet; if they keep their clients updated as the case goes on; 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 insurer has a reputation of honoring claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you should keep looking.