Subrogation is an idea that's well-known among legal and insurance companies but sometimes not by the policyholders who employ them. Rather than leave it to the professionals, it would be to your advantage to know an overview of the process. The more you know about it, the more likely an insurance lawsuit will work out favorably.

Every insurance policy you have is an assurance that, if something bad happens to you, the company that insures the policy will make restitutions in one way or another without unreasonable delay. If your home burns down, your property insurance agrees to remunerate you or pay for the repairs, subject to state property damage laws.

But since ascertaining who is financially accountable for services or repairs is usually a heavily involved affair – and time spent waiting sometimes increases the damage to the victim – insurance companies often decide to pay up front and figure out the blame afterward. They then need a way to regain the costs if, once the situation is fully assessed, they weren't actually in charge of the expense.

Let's Look at an Example

You go to the emergency room with a sliced-open finger. You give the receptionist your health insurance card and he records your policy details. You get stitches and your insurance company gets an invoice for the tab. But the next morning, when you get to your place of employment – where the accident occurred – your boss hands you workers compensation forms to file. Your employer's workers comp policy is actually responsible for the bill, not your health insurance policy. 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 method 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 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.

How Does This Affect Policyholders?

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 – to be precise, $1,000. If your insurer is timid on any subrogation case it might not win, it might opt to recoup its costs by upping your premiums. On the other hand, if it has a knowledgeable legal team and goes after them aggressively, it is acting both in its own interests and in yours. If all $10,000 is recovered, you will get your full 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, depending on your state laws.

Additionally, 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 criminal law defense lawyer Hillsboro OR, pursue subrogation and wins, it will recover your costs as well as its own.

All insurance agencies are not created equal. When shopping around, it's worth looking at the reputations of competing agencies to evaluate whether they pursue winnable subrogation claims; if they do so fast; if they keep their customers informed as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your money back and move on with your life. If, instead, 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.