Subrogation is an idea that's well-known in legal and insurance circles but often not by the policyholders who hire them. Even if you've never heard the word before, it is in your benefit to know the nuances of the process. The more information you have, the more likely an insurance lawsuit will work out in your favor.
Any insurance policy you have is an assurance that, if something bad occurs, the firm that covers the policy will make good in one way or another in a timely manner. If your vehicle is hit, insurance adjusters (and the judicial system, when necessary) decide who was to blame and that party's insurance covers the damages.
But since determining who is financially responsible for services or repairs is usually a heavily involved affair – and delay in some cases adds to the damage to the victim – insurance firms in many cases opt to pay up front and figure out the blame later. They then need a method to regain the costs if, when all is said and done, they weren't actually in charge of the payout.
Let's Look at an Example
Your kitchen catches fire and causes $10,000 in home damages. Luckily, you have property insurance and it pays for the repairs. However, the assessor assigned to your case discovers that an electrician had installed some faulty wiring, and there is reason to believe that a judge would find him accountable for the damages. The house has already been repaired in the name of expediency, but your insurance company is out $10,000. What does the company do next?
How Subrogation Works
This is where subrogation comes in. It is the process 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. Under ordinary circumstances, only you can sue for damages to your person or property. But under subrogation law, your insurer 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.
How Does This Affect Me?
For a start, if your insurance policy stipulated 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 – namely, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to recover its expenses by boosting your premiums. On the other hand, if it has a competent legal team and goes after those cases efficiently, 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 culpable), you'll typically get half your deductible back, based on the laws in most states.
In addition, 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 serious injury lawyers Severna Park MD, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurers are not the same. When shopping around, it's worth looking at the reputations of competing agencies to determine whether they pursue valid subrogation claims; if they do so without dragging their feet; if they keep their clients posted as the case continues; 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 reputation of paying out claims that aren't its responsibility and then safeguarding its profitability by raising your premiums, you should keep looking.serious injury lawyers Severna Park MD