Subrogation is a concept that's understood among legal and insurance companies but rarely by the customers who employ them. Even if it sounds complicated, it is to your advantage to understand the steps of the process. The more knowledgeable you are, the better decisions you can make about your insurance policy.

An insurance policy you hold is a promise that, if something bad occurs, the business that insures the policy will make good without unreasonable delay. If your home is burglarized, your property insurance steps in to compensate you or facilitate the repairs, subject to state property damage laws.

But since figuring out who is financially accountable for services or repairs is usually a confusing affair – and time spent waiting sometimes compounds the damage to the policyholder – insurance companies in many cases decide to pay up front and assign blame afterward. They then need a way to recover the costs if, once the situation is fully assessed, they weren't actually in charge of the payout.

For Example

You are in a highway accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance details, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was to blame and her insurance policy should have paid for the repair of your vehicle. How does your company get its money back?

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. Normally, only you can sue for damages done to your person 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.

How Does This Affect Individuals?

For starters, if you have 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 have a stake in the outcome as well – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its expenses by upping your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is acting both in its own interests and in yours. 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 50 percent culpable), 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 could be in for a stiff bill. If your insurance company or its property damage lawyers, such as Personal injury attorney Lithia Springs, GA, pursue subrogation and succeeds, it will recover your expenses in addition to its own.

All insurers are not the same. When shopping around, it's worth measuring the reputations of competing companies to determine if they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their clients apprised as the case continues; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, instead, an insurer has a record of paying out claims that aren't its responsibility and then protecting its income by raising your premiums, even attractive rates won't outweigh the eventual headache.

Personal injury attorney Lithia Springs, GA

Subrogation is a concept that's understood among legal and insurance firms but sometimes not by the people who employ them. If this term has come up when dealing with your insurance agent or a legal proceeding, it would be in your self-interest to comprehend an overview of the process. The more you know about it, the better decisions you can make with regard to your insurance policy.

An insurance policy you hold is a promise that, if something bad happens to you, the firm that covers the policy will make good in one way or another in a timely manner. If your home burns down, for instance, your property insurance steps in to pay you or enable the repairs, subject to state property damage laws.

But since figuring out who is financially responsible for services or repairs is typically a heavily involved affair – and time spent waiting sometimes compounds the damage to the victim – insurance companies often opt to pay up front and assign blame afterward. They then need a path to recoup the costs if, when all the facts are laid out, they weren't actually in charge of the payout.

Can You Give an Example?

You head to the Instacare with a sliced-open finger. You hand the nurse your medical insurance card and she records your policy information. You get stitches and your insurer is billed for the tab. But on the following morning, when you clock in at work – where the injury happened – you are given workers compensation paperwork to turn in. Your employer's workers comp policy is in fact responsible for the bill, not your medical insurance policy. The latter has a right to recover its money somehow.

How Subrogation Works

This is where subrogation comes in. It is the way that an insurance company uses to claim payment 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 considered to have 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.

How Does This Affect Individuals?

For a start, if you have a deductible, your insurer wasn't the only one that 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 insurer is timid on any subrogation case it might not win, it might opt to get back its losses by raising your premiums. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is doing you a favor as well as itself. If all 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 at fault), you'll typically get half your deductible back, depending on your state laws.

In addition, if the total expense 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 personal injury claims Marietta, GA, successfully press a subrogation case, it will recover your expenses as well as its own.

All insurance agencies are not created equal. When comparing, it's worth measuring the reputations of competing companies to find out whether they pursue legitimate subrogation claims; if they do so quickly; if they keep their customers updated as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your money back and move on with your life. If, instead, an insurance firm has a reputation of honoring claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you should keep looking.

Subrogation is an idea that's well-known among legal and insurance firms but often not by the policyholders who employ them. Rather than leave it to the professionals, it is to your advantage to understand the steps of the process. The more knowledgeable you are about it, the better decisions you can make about your insurance policy.

Any insurance policy you have is a promise that, if something bad happens to you, the business on the other end of the policy will make restitutions without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and the judicial system, when necessary) determine who was at fault and that person's insurance pays out.

But since determining who is financially responsible for services or repairs is typically a confusing affair – and time spent waiting often adds to the damage to the victim – insurance firms usually decide to pay up front and assign blame after the fact. They then need a path to recoup the costs if, ultimately, they weren't actually responsible for the payout.

For Example

Your living room catches fire and causes $10,000 in house damages. Happily, you have property insurance and it pays for the repairs. However, the insurance investigator finds out that an electrician had installed some faulty wiring, and there is a decent chance that a judge would find him accountable for the loss. You already have your money, but your insurance company is out all that money. What does the company do next?

How Does Subrogation Work?

This is where subrogation comes in. It is the method 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 to your self or property. But under subrogation law, your insurer is extended 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.

Why Does This Matter to Me?

For starters, if you have a deductible, your insurer 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 unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its losses by increasing your premiums and call it a day. On the other hand, if it has a capable legal team and pursues them enthusiastically, it is acting both in its own interests and in yours. If all is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half at fault), you'll typically get $500 back, based on the laws in most states.

In addition, if the total cost 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 child custody help boulder city Nv, 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 comparing the reputations of competing firms to evaluate whether they pursue legitimate subrogation claims; if they do so without delay; if they keep their policyholders advised as the case continues; 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 insurance agency has a record of paying out claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.