Subrogation is an idea that's understood among insurance and legal firms but often not by the people they represent. Rather than leave it to the professionals, it would be in your self-interest to know an overview of the process. The more you know about it, the more likely an insurance lawsuit will work out favorably.

An insurance policy you have is a promise that, if something bad happens to you, the company that insures the policy will make good in one way or another in a timely manner. If your vehicle is in a fender-bender, insurance adjusters (and police, when necessary) determine who was to blame and that party's insurance covers the damages.

But since ascertaining who is financially responsible for services or repairs is regularly a confusing affair – and time spent waiting sometimes compounds the damage to the victim – insurance companies in many cases opt to pay up front and figure out the blame later. They then need a way to regain the costs if, when all the facts are laid out, they weren't in charge of the expense.

Let's Look at an Example

You are in a car accident. Another car collided with yours. The police show up to assess the situation, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later police tell the insurance companies that the other driver was entirely to blame and his insurance should have paid for the repair of your car. How does your company get its money back?

How Subrogation Works

This is where subrogation comes in. It is the way that an insurance company uses to claim payment 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 person or property. But under subrogation law, your insurance company is extended some of your rights for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.

Why Should I Care?

For a start, if your insurance policy stipulated a deductible, it wasn't just your insurance company who 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 unconcerned with pursuing subrogation even when it is entitled, it might opt to recoup its expenses by increasing your premiums. On the other hand, if it has a knowledgeable legal team and pursues those cases aggressively, 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 one-half culpable), you'll typically get half your deductible back, depending on the laws in your state.

Furthermore, 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 personal injury attorney near me Tacoma Wa, pursue subrogation and wins, it will recover your expenses as well as its own.

All insurance companies are not created equal. When comparing, it's worth looking at the reputations of competing agencies to find out whether they pursue valid subrogation claims; if they do so with some expediency; if they keep their policyholders apprised as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, on the other hand, an insurer has a reputation of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you'll feel the sting later.