Subrogation is a concept that's understood in insurance and legal circles but often not by the people they represent. Even if you've never heard the word before, it is in your benefit to comprehend the nuances of how it works. The more you know about it, the more likely it is that relevant proceedings will work out in your favor.
Any insurance policy you hold is a commitment that, if something bad occurs, the business that covers the policy will make restitutions without unreasonable delay. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) determine who was to blame and that person's insurance pays out.
But since determining who is financially accountable for services or repairs is sometimes a heavily involved affair – and time spent waiting often increases the damage to the policyholder – insurance firms in many cases opt to pay up front and assign blame afterward. They then need a method to get back the costs if, ultimately, they weren't in charge of the payout.
Your electric outlet catches fire and causes $10,000 in house damages. Fortunately, you have property insurance and it pays for the repairs. However, the insurance investigator finds out that an electrician had installed some faulty wiring, and there is a reasonable possibility that a judge would find him to blame for the damages. You already have your money, but your insurance firm is out all that money. What does the firm do next?
How Does Subrogation Work?
This is where subrogation comes in. It is the method 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. Under ordinary circumstances, only you can sue for damages to your self or property. But under subrogation law, your insurer is extended 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 you have 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 insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to get back its expenses by ballooning your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after them aggressively, it is doing you a favor as well as itself. If all is recovered, you will get your full thousand-dollar 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 the laws in your state.
Furthermore, 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 catastrophic personal injury lawyer Severna Park MD, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurance companies are not the same. When shopping around, it's worth scrutinizing the records of competing companies to determine whether they pursue valid subrogation claims; if they do so fast; if they keep their customers apprised as the case goes on; and if they then process successfully won reimbursements quickly so that you can get your deductible back and move on with your life. If, instead, an insurance firm has a reputation of paying out claims that aren't its responsibility and then protecting its income by raising your premiums, you should keep looking.catastrophic personal injury lawyer Severna Park MD