- 8 15, 2018
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Subrogation is a term that's understood among legal and insurance professionals but often not by the people they represent. Even if it sounds complicated, it is in your self-interest to comprehend an overview of how it works. The more you know, the more likely relevant proceedings will work out favorably.
Every insurance policy you hold is a commitment that, if something bad happens to you, the firm that covers the policy will make restitutions in a timely manner. If you get hurt while working, for example, your employer's workers compensation insurance agrees to pay 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 typically a confusing affair – and delay sometimes increases the damage to the victim – insurance firms usually decide to pay up front and assign blame after the fact. They then need a mechanism to get back the costs if, in the end, they weren't actually in charge of the payout.
You arrive at the Instacare with a deeply cut finger. You hand the nurse your health insurance card and she takes down your plan details. You get stitches and your insurer is billed for the expenses. But on the following day, when you clock in at your place of employment – where the injury occurred – your boss hands you workers compensation forms to file. Your employer's workers comp policy is actually responsible for the expenses, not your health insurance. The latter has an interest in recovering its money somehow.
How Subrogation Works
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. Usually, 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 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.
Why Should I Care?
For a start, 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 – 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 ballooning your premiums. On the other hand, if it knows which cases it is owed and pursues them efficiently, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full 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, based on the laws in most states.
In addition, 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 Child Custody lawyer delavan wi, successfully press a subrogation case, it will recover your losses as well as its own.
All insurance agencies are not the same. When shopping around, it's worth looking up the reputations of competing agencies to evaluate whether they pursue legitimate subrogation claims; if they do so fast; if they keep their policyholders informed 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 insurance agency has a reputation of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.