Subrogation is a term that's well-known among insurance and legal professionals but often not by the people they represent. Even if it sounds complicated, it is in your self-interest to understand the steps of how it works. 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 insurer of the policy will make good without unreasonable delay. If you get injured while working, your company's workers compensation agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially accountable for services or repairs is often a heavily involved affair – and time spent waiting often compounds the damage to the victim – insurance firms usually opt to pay up front and figure out the blame after the fact. They then need a way to get back the costs if, when all the facts are laid out, they weren't in charge of the payout.

Can You Give an Example?

You are in an auto accident. Another car crashed into yours. Police are called, you exchange insurance details, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was to blame and her insurance policy should have paid for the repair of your vehicle. How does your company get its money back?

How Does Subrogation Work?

This is where subrogation comes in. It is the way that an insurance company uses to claim reimbursement after it has paid for something that should have been paid by some other entity. Some insurance firms have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is given some of your rights for making good on the damages. It can go after the money that was originally due to you, because it has covered the amount already.

Why Does This Matter to Me?

For starters, if your insurance policy stipulated a deductible, it wasn't just your insurance company 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 insurer is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its costs by increasing your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues those cases enthusiastically, it is doing you a favor as well as itself. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get half your deductible back, depending on your state laws.

Moreover, if the total price of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as family law tumwater wa, successfully press a subrogation case, it will recover your costs as well as its own.

All insurers are not created equal. When comparing, it's worth measuring the reputations of competing agencies to evaluate whether they pursue winnable subrogation claims; if they resolve those claims without delay; if they keep their accountholders informed as the case continues; and if they then process successfully won reimbursements quickly so that you can get your losses back and move on with your life. If, instead, an insurer 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.

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