Subrogation is an idea that's well-known in insurance and legal circles but rarely by the people who hire them. Even if it sounds complicated, it is in your self-interest to comprehend an overview of the process. The more information you have about it, the more likely relevant proceedings will work out favorably.
An insurance policy you have is a promise that, if something bad happens to you, the insurer of the policy will make good in one way or another without unreasonable delay. If your vehicle is hit, insurance adjusters (and the courts, when necessary) determine who was at fault and that party's insurance pays out.
But since figuring out who is financially responsible for services or repairs is often a heavily involved affair – and delay often adds to the damage to the policyholder – insurance companies often decide to pay up front and figure out the blame later. They then need a method to regain the costs if, once the situation is fully assessed, they weren't responsible for the payout.
You are in a highway accident. Another car crashed into yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance and file a repair claim. Later police tell the insurance companies that the other driver was entirely at fault and her insurance policy should have paid for the repair of your car. How does your company get its money back?
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 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.
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 have a stake in the outcome as well – namely, $1,000. If your insurance company is timid on any subrogation case it might not win, it might choose to recoup its costs by raising your premiums. On the other hand, if it knows which cases it is owed and pursues them aggressively, it is acting both in its own interests and in yours. If all of the money 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 immigration attorney Herriman UT, pursue subrogation and wins, it will recover your losses as well as its own.
All insurance agencies are not the same. When comparing, it's worth comparing the reputations of competing agencies to find out whether they pursue valid subrogation claims; if they do so fast; if they keep their policyholders apprised as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, instead, an insurance agency has a reputation of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.