Subrogation is a term that's understood among insurance and legal firms but sometimes not by the customers who employ them. Rather than leave it to the professionals, it would be in your self-interest to comprehend an overview of how it works. The more knowledgeable you are, the more likely it is that an insurance lawsuit will work out in your favor.

Every insurance policy you hold is a commitment that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another in a timely manner. If your vehicle is hit, insurance adjusters (and police, when necessary) decide who was to blame and that party's insurance pays out.

But since ascertaining who is financially responsible for services or repairs is often a heavily involved affair – and time spent waiting sometimes adds to the damage to the victim – insurance firms usually decide to pay up front and assign blame after the fact. They then need a way to recover the costs if, when there is time to look at all the facts, they weren't in charge of the expense.

For Example

You are in a car accident. Another car ran into yours. Police are called, you exchange insurance information, and you go on your way. You have comprehensive insurance that pays for the repairs right away. Later it's determined that the other driver was to blame and his insurance policy should have paid for the repair of your auto. How does your insurance company get its money back?

How Subrogation Works

This is where subrogation comes in. It is the process that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. Some insurance firms 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 to your person or property. But under subrogation law, your insurer 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.

Why Does This Matter to 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 – to be precise, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its costs by boosting your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues those cases aggressively, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found one-half responsible), you'll typically get $500 back, depending on your state laws.

Moreover, if the total loss of an accident is more than your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as criminal law defense lawyer Portland OR, 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 examining the records of competing firms to find out if they pursue valid subrogation claims; if they resolve those claims with some expediency; if they keep their accountholders advised 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, on the other hand, an insurance agency has a reputation of paying out claims that aren't its responsibility and then covering its profitability by raising your premiums, you'll feel the sting later.