Subrogation is an idea that's understood among insurance and legal companies but rarely by the customers they represent. Even if it sounds complicated, it is in your self-interest to understand an overview of the process. The more you know about it, the better decisions you can make with regard to your insurance company.
Any insurance policy you own is a commitment that, if something bad occurs, the firm on the other end of the policy will make good without unreasonable delay. If you get hurt while you're on the clock, 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 ascertaining who is financially accountable for services or repairs is often a tedious, lengthy affair – and time spent waiting often adds to the damage to the victim – insurance companies often opt to pay up front and figure out the blame afterward. They then need a path to recoup the costs if, in the end, they weren't actually responsible for the payout.
Can You Give an Example?
You arrive at the Instacare with a gouged finger. You hand the nurse your health insurance card and he writes down your plan details. You get taken care of and your insurer gets an invoice for the services. But the next day, when you arrive at work – where the injury occurred – your boss hands you workers compensation forms to file. Your employer's workers comp policy is actually responsible for the hospital trip, not your health insurance. The latter has an interest in recovering its costs somehow.
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. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurer is given 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.
How Does This Affect Policyholders?
For starters, if your insurance policy stipulated a deductible, your insurer 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 unconcerned with pursuing subrogation even when it is entitled, it might choose to recoup its losses by increasing your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is acting both in its own interests and in yours. If all $10,000 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 to blame), you'll typically get $500 back, depending on your state laws.
Moreover, 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 divorce lawyer east olympia wa, pursue subrogation and succeeds, it will recover your losses as well as its own.
All insurers are not created equal. When comparing, it's worth comparing the reputations of competing firms to find out whether they pursue valid subrogation claims; if they resolve those claims quickly; if they keep their customers informed as the case continues; 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, instead, an insurance firm 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.