- 2 14, 2019
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Subrogation is a term that's well-known among insurance and legal professionals but rarely by the policyholders they represent. Rather than leave it to the professionals, it would be to your advantage to comprehend the steps of the process. The more you know, the better decisions you can make about your insurance policy.
Any insurance policy you have is an assurance that, if something bad occurs, the business on the other end of the policy will make good in a timely manner. If you get injured on the job, for instance, your employer's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.
But since figuring out who is financially responsible for services or repairs is typically a time-consuming affair – and delay in some cases increases the damage to the victim – insurance companies often opt to pay up front and assign blame afterward. They then need a method to recover the costs if, when all is said and done, they weren't actually in charge of the expense.
Can You Give an Example?
You head to the emergency room with a deeply cut finger. You give the nurse your health insurance card and she takes down your coverage information. You get taken care of and your insurer is billed for the services. But on the following morning, when you get to work – where the accident occurred – your boss hands you workers compensation paperwork to turn in. Your company's workers comp policy is actually responsible for the expenses, not your health insurance company. The latter has a right to recover its costs in some way.
How Does Subrogation Work?
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 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 person 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 Does This Matter to Me?
For a start, if you have a deductible, it wasn't just your insurer that had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to the tune of $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to recoup its losses by increasing your premiums and call it a day. On the other hand, if it has a competent legal team and goes after them enthusiastically, 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 to blame), you'll typically get $500 back, depending on your state laws.
In addition, if the total expense of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as injury attorney glen burnie, md, pursue subrogation and succeeds, it will recover your costs in addition to its own.
All insurance companies are not created equal. When comparing, it's worth looking at the reputations of competing companies to find out if they pursue winnable subrogation claims; if they resolve those claims with some expediency; if they keep their clients posted as the case goes on; 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, on the other hand, an insurer has a record of paying out claims that aren't its responsibility and then safeguarding its profit margin by raising your premiums, you'll feel the sting later.