Subrogation is a concept that's well-known among legal and insurance firms but sometimes not by the people who hire them. If this term has come up when dealing with your insurance agent or a legal proceeding, it is in your benefit to know the steps of the process. The more information you have, the better decisions you can make about your insurance policy.

An insurance policy you hold is an assurance that, if something bad happens to you, the insurer of the policy will make good in one way or another in a timely fashion. If your home suffers fire damage, your property insurance steps in to compensate you or enable the repairs, subject to state property damage laws.

But since determining who is financially accountable for services or repairs is regularly a confusing affair – and time spent waiting in some cases compounds the damage to the victim – insurance firms often decide to pay up front and assign blame later. They then need a method to recoup the costs if, in the end, they weren't actually responsible for the payout.

For Example

You rush into the Instacare with a gouged finger. You give the nurse your medical insurance card and she writes down your plan information. You get stitches and your insurance company gets a bill for the services. But on the following morning, when you clock in at your workplace – where the accident happened – your boss hands you workers compensation paperwork to turn in. Your company's workers comp policy is actually responsible for the bill, not your medical insurance. 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. Normally, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is given some of your rights in exchange for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.

Why Do I Need to Know This?

For starters, if your insurance policy stipulated a deductible, it wasn't just your insurance company who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to be precise, $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to get back its losses by upping your premiums. On the other hand, if it knows which cases it is owed and pursues those cases aggressively, it is doing you a favor as well as itself. If all $10,000 is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get $500 back, depending on your state laws.

Additionally, if the total cost 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 auto accident mableton ga, pursue subrogation and succeeds, it will recover your losses as well as its own.

All insurance agencies are not the same. When shopping around, it's worth contrasting the records of competing agencies to determine whether they pursue valid subrogation claims; if they do so quickly; if they keep their clients updated as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your money back and move on with your life. If, on the other hand, an insurance agency has a reputation of honoring claims that aren't its responsibility and then safeguarding its income by raising your premiums, you should keep looking.