Subrogation is an idea that's well-known among insurance and legal professionals but often not by the people they represent. Even if you've never heard the word before, it would be to your advantage to comprehend the steps of how it works. The more you know about it, the more likely it is that relevant proceedings will work out favorably.

An insurance policy you hold is an assurance that, if something bad happens to you, the business that covers the policy will make good in a timely fashion. If you get an injury on the job, your employer's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.

But since figuring out who is financially accountable for services or repairs is typically a time-consuming affair – and delay in some cases compounds the damage to the policyholder – insurance companies usually decide to pay up front and figure out the blame later. They then need a means to recover the costs if, when all is said and done, they weren't in charge of the payout.

Can You Give an Example?

You arrive at the emergency room with a sliced-open finger. You hand the nurse your health insurance card and she takes down your plan details. You get stitched up and your insurer is billed for the expenses. But the next day, when you get to work – where the accident occurred – your boss hands you workers compensation paperwork to turn in. Your employer's workers comp policy is in fact responsible for the invoice, not your health insurance policy. The latter has a right to recover its money somehow.

How Subrogation Works

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 insurance firms have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Ordinarily, only you can sue for damages done to your person or property. But under subrogation law, your insurer is extended some of your rights in exchange for having taken care of the damages. It can go after the money that was 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 insurer that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to the tune of $1,000. If your insurer is timid on any subrogation case it might not win, it might choose to recoup its losses by raising your premiums. On the other hand, if it has a competent legal team and goes after those cases efficiently, it is doing you a favor as well as itself. If all of the money is recovered, you will get your full $1,000 deductible back. If it recovers half (for instance, in a case where you are found 50 percent responsible), you'll typically get half your deductible back, depending on the laws in your state.

Moreover, if the total cost 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 Family law Las Vegas NV, pursue subrogation and succeeds, it will recover your expenses as well as its own.

All insurance companies are not created equal. When shopping around, it's worth comparing the reputations of competing companies to determine whether they pursue legitimate subrogation claims; if they do so without delay; if they keep their policyholders updated as the case proceeds; and if they then process successfully won reimbursements right away so that you can get your funding back and move on with your life. If, on the other hand, an insurer has a reputation of paying out claims that aren't its responsibility and then protecting its bottom line by raising your premiums, you should keep looking.