What Every Policy holder Ought to Know About Subrogation

Subrogation is an idea that's well-known in legal and insurance circles but rarely by the policyholders who hire them. Even if it sounds complicated, it is to your advantage to know an overview of how it works. The more knowledgeable you are, the better decisions you can make with regard to your insurance company.

Any insurance policy you have is a promise that, if something bad occurs, the insurer of the policy will make good in one way or another in a timely fashion. If a blizzard damages your home, for instance, your property insurance agrees to remunerate you or enable the repairs, subject to state property damage laws.

But since figuring out who is financially responsible for services or repairs is often a heavily involved affair – and time spent waiting often compounds the damage to the policyholder – insurance firms usually decide to pay up front and figure out the blame afterward. They then need a means to recoup the costs if, in the end, they weren't actually in charge of the expense.

Let's Look at an Example

You are in a car accident. Another car crashed into yours. Police are called, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later police tell the insurance companies that the other driver was entirely to blame and his insurance should have paid for the repair of your car. How does your insurance company get its money back?

How Subrogation Works

This is where subrogation comes in. It is the process 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. Normally, only you can sue for damages done to your person 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 starters, 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 – namely, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its costs by raising your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues them efficiently, it is doing you a favor as well as itself. If all of the money 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 to blame), you'll typically get $500 back, based on the laws in most states.

Additionally, 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 discrimination lawyer federal way wa, pursue subrogation and wins, it will recover your costs in addition to its own.

All insurers are not the same. When comparing, it's worth weighing the reputations of competing companies to determine if they pursue legitimate subrogation claims; if they do so without dragging their feet; if they keep their policyholders advised 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, instead, an insurance company has a record of honoring claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you should keep looking.


The Things Every Insurance Policy holder Ought to Know About Subrogation

Subrogation is an idea that's understood among insurance and legal firms but rarely by the people who hire them. Rather than leave it to the professionals, it is in your self-interest to understand an overview of how it works. The more knowledgeable you are about it, the more likely relevant proceedings will work out in your favor.

Any insurance policy you have is an assurance that, if something bad happens to you, the firm on the other end of the policy will make good in a timely manner. If you get hurt while you're on the clock, for example, your employer's workers compensation pays out 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 sometimes a tedious, lengthy affair – and delay often compounds the damage to the policyholder – insurance firms in many cases decide to pay up front and assign blame afterward. They then need a method to get back the costs if, once the situation is fully assessed, they weren't actually in charge of the expense.

Let's Look at an Example

You are in an auto accident. Another car ran into yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later police tell the insurance companies that the other driver was entirely at fault and her insurance policy should have paid for the repair of your vehicle. How does your insurance company get its funds back?

How Subrogation Works

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. Ordinarily, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is given some of your rights in exchange 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 one thing, 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 be precise, $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to get back its losses by ballooning your premiums. On the other hand, if it knows which cases it is owed and goes after those cases 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 one-half to blame), you'll typically get $500 back, based on the laws in most states.

Furthermore, 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 attorney at law lacey wa, pursue subrogation and succeeds, it will recover your losses in addition to its own.

All insurance companies are not the same. When comparing, it's worth scrutinizing the records of competing agencies to evaluate if they pursue legitimate subrogation claims; if they do so quickly; if they keep their accountholders updated as the case goes on; 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 insurer has a reputation of honoring claims that aren't its responsibility and then safeguarding its income by raising your premiums, even attractive rates won't outweigh the eventual headache.