Subrogation is a concept that's understood in insurance and legal circles but sometimes not by the policyholders they represent. Rather than leave it to the professionals, it is to your advantage to understand an overview of the process. The more information you have about it, the better decisions you can make about your insurance policy.
An insurance policy you hold is an assurance that, if something bad occurs, the insurer of the policy will make good in one way or another without unreasonable delay. If you get hurt while working, your employer's workers compensation pays out 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 usually a heavily involved affair – and time spent waiting sometimes increases the damage to the victim – insurance companies often opt to pay up front and assign blame after the fact. They then need a mechanism to recover the costs if, when there is time to look at all the facts, they weren't responsible for the expense.
You arrive at the hospital with a gouged finger. You give the receptionist your medical insurance card and she writes down your plan details. You get stitched up and your insurance company gets a bill for the medical care. But on the following day, when you get to your place of employment – where the accident occurred – you are given workers compensation paperwork to turn in. Your company's workers comp policy is actually responsible for the bill, not your medical insurance. It has a vested interest in getting that money back in some way.
How Subrogation Works
This is where subrogation comes in. It is the process that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. 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. Under ordinary circumstances, only you can sue for damages to your self or property. But under subrogation law, your insurance company is considered to have some of your rights in exchange 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 a start, 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 lost some money too – to the tune of $1,000. If your insurance company is lax about bringing subrogation cases to court, it might choose to recover its expenses by boosting 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 acting both in its own interests and in yours. If all ten grand is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent accountable), you'll typically get half your deductible back, depending on the laws in your state.
In addition, if the total expense 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 wills and estate planning paddock lake wi, 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 scrutinizing the reputations of competing firms to determine whether they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their clients apprised as the case continues; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, instead, an insurance firm has a reputation of honoring claims that aren't its responsibility and then protecting its profit margin by raising your premiums, even attractive rates won't outweigh the eventual headache.wills and estate planning paddock lake wi