Subrogation is an idea that's understood among legal and insurance firms but often not by the people who hire them. Even if it sounds complicated, it is to your advantage to understand the steps of the process. The more information you have about it, the more likely it is that an insurance lawsuit will work out favorably.

Every insurance policy you own is a commitment that, if something bad happens to you, the company that covers the policy will make good in one way or another without unreasonable delay. If you get hurt on the job, your employer's workers compensation insurance picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially responsible for services or repairs is sometimes a time-consuming affair – and time spent waiting in some cases adds to the damage to the policyholder – insurance companies in many cases opt to pay up front and figure out the blame after the fact. They then need a method to recover the costs if, when there is time to look at all the facts, they weren't responsible for the expense.

For Example

You are in a car accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance information, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was entirely to blame and her insurance policy should have paid for the repair of your auto. How does your company get its funds back?

How Does Subrogation Work?

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 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 to your person 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 originally due to you, because it has covered the amount already.

How Does This Affect Me?

For one thing, if you have a deductible, your insurer 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 lax about bringing subrogation cases to court, it might opt to get back its expenses by raising your premiums and call it a day. On the other hand, if it has a knowledgeable legal team and pursues those cases aggressively, it is doing you a favor as well as itself. If all ten grand is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get $500 back, depending on your state laws.

In addition, if the total cost 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 personal injury legal assistance Tacoma WA, pursue subrogation and wins, it will recover your losses in addition to its own.

All insurers are not created equal. When comparing, it's worth looking at the reputations of competing firms to determine whether they pursue valid subrogation claims; if they do so in a reasonable amount of time; if they keep their customers 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 honoring claims that aren't its responsibility and then protecting its income by raising your premiums, you should keep looking.