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What Every Policy holder Ought to Know About Subrogation

  • 8 21, 2018
  • |Law
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Subrogation is a concept that's understood in legal and insurance circles but rarely by the policyholders who employ them. Rather than leave it to the professionals, it would be to your advantage to comprehend the steps of the process. The more you know about it, the better decisions you can make with regard to your insurance policy.

An insurance policy you own is a commitment that, if something bad occurs, the insurer of the policy will make restitutions without unreasonable delay. If you get hurt at work, for instance, your company's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.

But since determining who is financially responsible for services or repairs is sometimes a time-consuming affair – and time spent waiting in some cases adds to the damage to the policyholder – insurance firms in many cases opt to pay up front and assign blame afterward. They then need a means to get back the costs if, when all the facts are laid out, they weren't responsible for the expense.

Let's Look at an Example

You go to the Instacare with a sliced-open finger. You give the receptionist your health insurance card and she writes down your coverage information. You get taken care of and your insurer gets an invoice for the services. But on the following morning, when you clock in at your workplace – where the injury happened – you are given workers compensation forms to fill out. Your employer's workers comp policy is actually responsible for the bill, not your health insurance policy. It has a vested interest in getting that money back somehow.

How Subrogation Works

This is where subrogation comes in. It is the process that an insurance company uses to claim reimbursement 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. Under ordinary circumstances, only you can sue for damages 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.

Why Should I Care?

For starters, 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 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 recover its losses by ballooning your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues those cases aggressively, it is acting both in its own interests and in yours. 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 one-half accountable), you'll typically get $500 back, based on the laws in most states.

Additionally, 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 Child Custody lawyer delavan wi, successfully press a subrogation case, it will recover your costs in addition to its own.

All insurers are not created equal. When shopping around, it's worth researching the reputations of competing companies to determine if they pursue legitimate subrogation claims; if they do so fast; if they keep their accountholders informed as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your money back and move on with your life. If, instead, an insurer has a record of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.