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Subrogation and How It Affects You

  • 2 29, 2016
  • |Law
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Subrogation is a concept that's well-known among insurance and legal firms but often not by the people who hire them. If this term has come up when dealing with your insurance agent or a legal proceeding, it would be to your advantage to comprehend the nuances of how it works. The more you know, the more likely it is that an insurance lawsuit will work out in your favor.

Every insurance policy you own is an assurance that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another in a timely fashion. If your property is broken into, your property insurance steps in to compensate you or enable the repairs, subject to state property damage laws.

But since determining who is financially responsible for services or repairs is regularly a time-consuming affair – and delay in some cases compounds the damage to the victim – insurance companies often decide to pay up front and assign blame after the fact. They then need a means to recoup the costs if, when there is time to look at all the facts, they weren't actually in charge of the expense.

Can You Give an Example?

You rush into the doctor's office with a gouged finger. You give the nurse your health insurance card and she records your policy information. You get stitches and your insurer is billed for the medical care. But on the following morning, when you get to your place of employment – where the injury happened – you are given workers compensation paperwork to fill out. Your employer's workers comp policy is in fact responsible for the costs, not your health insurance company. The latter has a right to recover its costs in some way.

How Subrogation Works

This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement 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. Under ordinary circumstances, only you can sue for damages done 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 one thing, 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 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 recoup its losses by ballooning your premiums. On the other hand, if it has a competent legal team 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 $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 $500 back, based on the laws in most states.

In addition, 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 fall lawyer greater atlanta area, pursue subrogation and succeeds, it will recover your expenses in addition to its own.

All insurance companies are not created equal. When shopping around, it's worth scrutinizing the reputations of competing companies to determine if they pursue winnable subrogation claims; if they do so in a reasonable amount of time; if they keep their customers 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 record of honoring claims that aren't its responsibility and then covering its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.


Subrogation and How It Affects Policyholders

Subrogation is a term that's well-known among insurance and legal companies but rarely by the people who hire them. Even if it sounds complicated, it is to your advantage to understand an overview of the process. The more information you have about it, the better decisions you can make about your insurance policy.

Every insurance policy you own is an assurance that, if something bad occurs, the insurer of the policy will make good 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 accountable for services or repairs is typically a heavily involved affair – and delay often adds to the damage to the policyholder – insurance companies usually decide to pay up front and figure out the blame after the fact. 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 payout.

Let's Look at an Example

You arrive at the hospital with a gouged finger. You give the receptionist your medical insurance card and she takes down your policy details. You get stitched up and your insurer gets an invoice for the expenses. But the next afternoon, when you arrive at your place of employment – where the injury occurred – you are given workers compensation forms to fill out. Your workers comp policy is actually responsible for the costs, not your medical insurance. It has a vested interest in getting that money back 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 companies 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 self 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 your insurance policy stipulated 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 – namely, $1,000. If your insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its costs by raising your premiums. On the other hand, if it has a proficient legal team and pursues them efficiently, it is acting both in its own interests and in yours. 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 to blame), you'll typically get $500 back, based on the laws in most states.

Additionally, if the total loss 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 business law salem ut, successfully press a subrogation case, it will recover your costs in addition to its own.

All insurance companies are not created equal. When shopping around, it's worth looking at the records of competing agencies to find out if they pursue winnable subrogation claims; if they do so with some expediency; if they keep their customers posted as the case proceeds; 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, on the other hand, an insurer has a reputation of paying out claims that aren't its responsibility and then covering its profit margin by raising your premiums, you should keep looking.


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  • 2 29, 2016
  • |Travel
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