Subrogation is an idea that's understood in legal and insurance circles but often not by the policyholders they represent. Even if it sounds complicated, it is in your self-interest to comprehend the steps of how it works. The more information you have, the more likely an insurance lawsuit will work out in your favor.
Every insurance policy you own is an assurance that, if something bad happens to you, the company on the other end of the policy will make restitutions without unreasonable delay. If you get an injury while you're on the clock, your employer's workers compensation picks up the tab for medical services. Employment lawyers handle the details; you just get fixed up.
But since determining who is financially accountable for services or repairs is typically a time-consuming affair – and delay often compounds the damage to the victim – insurance firms usually opt to pay up front and figure out the blame afterward. They then need a method to recover the costs if, when all the facts are laid out, they weren't actually responsible for the expense.
Can You Give an Example?
You arrive at the doctor's office with a gouged finger. You hand the nurse your medical insurance card and he takes down your plan information. You get stitches and your insurance company is billed for the expenses. But the next day, when you get to your workplace – where the injury occurred – your boss hands you workers compensation paperwork to fill out. Your employer's workers comp policy is in fact responsible for the invoice, not your medical insurance company. The latter has an interest in recovering its costs in some way.
How Does Subrogation Work?
This is where subrogation comes in. It is the method that an insurance company uses to claim payment 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 done to your self or property. But under subrogation law, your insurance company is extended some of your rights for making good on the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Does This Matter to Me?
For a start, if you have 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 – to be precise, $1,000. If your insurer is lax about bringing subrogation cases to court, it might opt to get back its costs by boosting 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 $10,000 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 accountable), you'll typically get $500 back, based on the laws in most states.
Moreover, 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 probate law attorney decatur tx, pursue subrogation and succeeds, it will recover your losses as well as its own.
All insurers are not the same. When shopping around, it's worth weighing the reputations of competing firms to determine whether they pursue legitimate subrogation claims; if they do so fast; if they keep their policyholders posted as the case continues; and if they then process successfully won reimbursements immediately so that you can get your losses back and move on with your life. If, instead, an insurer has a reputation of honoring claims that aren't its responsibility and then covering its bottom line by raising your premiums, you should keep looking.probate law attorney decatur tx