Subrogation is an idea that's well-known among insurance and legal firms but sometimes not by the people they represent. Even if it sounds complicated, it would be in your benefit to know the steps of how it works. The more information you have, the more likely an insurance lawsuit will work out in your favor.
Every insurance policy you have is an assurance that, if something bad occurs, the business that insures the policy will make good in a timely fashion. If you get hurt while you're on the clock, your company's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially responsible for services or repairs is often a heavily involved affair – and time spent waiting often adds to the damage to the victim – insurance firms usually opt to pay up front and figure out the blame after the fact. They then need a mechanism to regain the costs if, once the situation is fully assessed, they weren't actually in charge of the payout.
Your living room catches fire and causes $10,000 in home damages. Fortunately, you have property insurance and it pays for the repairs. However, in its investigation it finds out that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him liable for the loss. The home has already been repaired in the name of expediency, but your insurance agency is out $10,000. What does the agency 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. Under ordinary circumstances, only you can sue for damages 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 that was originally due to you, because it has covered the amount already.
Why Do I Need to Know This?
For a start, if your insurance policy stipulated a deductible, it wasn't just your insurance company 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 get back its costs by raising your premiums. On the other hand, if it has a proficient legal team and goes after those cases enthusiastically, it is doing you a favor as well as itself. 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 one-half accountable), you'll typically get half your deductible back, depending on the laws in your state.
Additionally, if the total expense 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 Olympia WAshinton attorney at law,, pursue subrogation and wins, it will recover your expenses in addition to its own.
All insurance companies are not the same. When shopping around, it's worth looking up the records of competing agencies to determine if they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their policyholders updated as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your funding back and move on with your life. If, instead, an insurer has a record of honoring claims that aren't its responsibility and then covering its income by raising your premiums, you'll feel the sting later.