Subrogation is a concept that's well-known in insurance and legal circles but rarely by the customers who employ them. Even if you've never heard the word before, it is to your advantage to know the nuances of the process. The more you know, the more likely relevant proceedings will work out in your favor.

An insurance policy you hold is a promise that, if something bad occurs, the firm that covers the policy will make restitutions without unreasonable delay. If your vehicle is hit, insurance adjusters (and the judicial system, when necessary) determine who was to blame and that person's insurance pays out.

But since figuring out who is financially responsible for services or repairs is often a heavily involved affair – and time spent waiting sometimes increases the damage to the victim – insurance companies often decide to pay up front and assign blame after the fact. They then need a means to recover the costs if, when all the facts are laid out, they weren't responsible for the expense.

Can You Give an Example?

You arrive at the Instacare with a gouged finger. You hand the nurse your health insurance card and he takes down your plan information. You get stitched up and your insurance company gets a bill for the services. But the next day, when you arrive at your workplace – where the injury occurred – you are given workers compensation forms to turn in. Your employer's workers comp policy is in fact responsible for the costs, not your health insurance. It has a vested interest in getting that money back 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 after it has paid for something that should have been paid by some other entity. Some companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Usually, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is considered to have 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.

How Does This Affect the Insured?

For starters, if your insurance policy stipulated a deductible, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you have a stake in the outcome as well – to the tune of $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recoup its expenses by raising your premiums. On the other hand, if it has a knowledgeable legal team and pursues them aggressively, it is doing you a favor as well as itself. If all ten grand 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 half your deductible back, based on the laws in most states.

Moreover, if the total expense 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 criminal law defense attorney Vancouver WA, pursue subrogation and succeeds, it will recover your expenses in addition to its own.

All insurers are not the same. When comparing, it's worth looking at the records of competing companies to evaluate if they pursue legitimate subrogation claims; if they resolve those claims in a reasonable amount of time; if they keep their clients posted as the case proceeds; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, instead, an insurance firm has a record of honoring claims that aren't its responsibility and then covering its profitability by raising your premiums, even attractive rates won't outweigh the eventual headache.