The Things You Need to Know About SubrogationSubrogation is an idea that's wellknown among insurance and legal professionals but sometimes not by the customers they represent. Even if you've never heard the word before it would be to your advantage to know the nuances of how it works. The more information you have about it the better decisions you can make about your insurance policy.

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Every insurance policy you hold is an assurance that, if something bad happens to you, the company that insures the policy will make good in a timely manner. If your home burns down, your property insurance steps in to pay you or pay for the repairs, subject to state property damage laws.

But since figuring out who is financially accountable for services or repairs is regularly a time-consuming affair – and time spent waiting sometimes adds to the damage to the victim – insurance companies usually opt to pay up front and figure out the blame later. They then need a mechanism to regain the costs if, when all is said and done, they weren't in charge of the payout.

For Example

Your stove catches fire and causes $10,000 in home damages. Happily, you have property insurance and it takes care of the repair expenses. However, in its investigation it finds out that an electrician had installed some faulty wiring, and there is a reasonable possibility that a judge would find him accountable for the loss. The house has already been repaired in the name of expediency, but your insurance company is out all that money. What does the company do next?

How Does Subrogation Work?

This is where subrogation comes in. It is the way that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. Some companies 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 to your self or property. But under subrogation law, your insurer is given some of your rights for making good on 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 you have a deductible, it wasn't just your insurer who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurance company is timid on any subrogation case it might not win, it might opt to recover its losses by raising your premiums and call it a day. On the other hand, if it has a capable legal team and pursues them 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 culpable), you'll typically get half your deductible back, depending on the laws in your state.

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 lawyer Hillsboro OR, successfully press a subrogation case, it will recover your costs as well as its own.

All insurance agencies are not created equal. When comparing, it's worth looking at the records of competing agencies to evaluate whether they pursue winnable subrogation claims; if they do so in a reasonable amount of time; if they keep their customers 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, instead, an insurance company has a record of honoring claims that aren't its responsibility and then covering its profitability by raising your premiums, you'll feel the sting later.

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