Subrogation is a term that's understood in insurance and legal circles but rarely by the customers who employ them. Rather than leave it to the professionals, it is to your advantage to understand the nuances of how it works. The more knowledgeable you are about it, the better decisions you can make with regard to your insurance policy.
Every insurance policy you own is an assurance that, if something bad happens to you, the insurer of the policy will make restitutions in one way or another without unreasonable delay. If your real estate suffers fire damage, for instance, your property insurance steps in to pay you or facilitate the repairs, subject to state property damage laws.
But since determining who is financially accountable for services or repairs is usually a tedious, lengthy affair – and time spent waiting sometimes adds to the damage to the policyholder – insurance firms often opt to pay up front and figure out the blame after the fact. They then need a path to recover the costs if, ultimately, they weren't responsible for the expense.
Can You Give an Example?
Your kitchen catches fire and causes $10,000 in home damages. Fortunately, you have property insurance and it pays for the repairs. However, in its investigation it finds out that an electrician had installed some faulty wiring, and there is a decent chance that a judge would find him accountable for the damages. The home 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 Subrogation Works
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. Normally, only you can sue for damages to your self or property. But under subrogation law, your insurer is given some of your rights in exchange 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 one thing, if you have a deductible, your insurer wasn't the only one 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 insurer is lax about bringing subrogation cases to court, it might choose to recoup its losses by raising your premiums and call it a day. On the other hand, if it has a capable legal team and goes after those cases enthusiastically, 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 accountable), you'll typically get half your deductible back, based on the laws in most states.
In addition, if the total expense of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely expensive. If your insurance company or its property damage lawyers, such as probate law attorney decatur tx, successfully press a subrogation case, it will recover your expenses in addition to its own.
All insurers are not created equal. When comparing, it's worth looking at the reputations of competing companies to find out if they pursue winnable subrogation claims; if they do so quickly; if they keep their customers updated 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 paying out claims that aren't its responsibility and then covering its income by raising your premiums, you should keep looking.probate law attorney decatur tx