Subrogation is an idea that's well-known in insurance and legal circles but sometimes not by the people they represent. Even if you've never heard the word before, it would be to your advantage to comprehend the nuances of the process. The more information you have about it, the more likely an insurance lawsuit will work out in your favor.

Any insurance policy you hold is an assurance that, if something bad happens to you, the insurer of the policy will make good in one way or another without unreasonable delay. If your vehicle is hit, insurance adjusters (and the judicial system, when necessary) decide who was to blame and that person's insurance covers the damages.

But since determining who is financially responsible for services or repairs is regularly a heavily involved affair – and time spent waiting sometimes increases the damage to the policyholder – insurance companies usually opt to pay up front and figure out the blame after the fact. They then need a means to regain the costs if, when all is said and done, they weren't actually responsible for the expense.

Can You Give an Example?

You rush into the hospital with a gouged finger. You give the receptionist your health insurance card and she takes down your plan details. You get stitches and your insurance company is billed for the medical care. But the next day, when you arrive at work – where the accident happened – you are given workers compensation forms to fill out. Your workers comp policy is in fact responsible for the payout, not your health insurance company. The latter has an interest in recovering its money in some way.

How Does Subrogation Work?

This is where subrogation comes in. It is the process that an insurance company uses to claim payment when it pays out a claim that turned out not to be its responsibility. 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. Normally, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is considered to have some of your rights in exchange for making good on 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 your insurance policy stipulated a deductible, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurance company is unconcerned with pursuing subrogation even when it is entitled, it might opt to recover its costs by increasing your premiums and call it a day. On the other hand, if it knows which cases it is owed and goes after 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 deductible back. If it recovers half (for instance, in a case where you are found 50 percent to blame), you'll typically get $500 back, depending on the laws in your state.

Moreover, 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 sexual assault defense lawyer 79101, successfully press a subrogation case, it will recover your losses as well as its own.

All insurers are not the same. When comparing, it's worth researching the reputations of competing agencies to evaluate whether they pursue valid subrogation claims; if they resolve those claims without dragging their feet; if they keep their policyholders apprised as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, instead, an insurer has a record of honoring claims that aren't its responsibility and then safeguarding its bottom line by raising your premiums, you should keep looking.