How Subrogation Affects You

You habox3ve just had a car wreck. While you were driving through an intersection someone ran a red light and hit your front end, spinning your car around forty-five degrees. Luckily, you only suffered from a neck strain and your car just needs some bodywork to be in drivable condition. You go ahead and pay your deductible, will say $800, and within three weeks you have your wheels back, you’re well on your way to physical recovery, and you’re back working and happy that things ran so smoothly. However you’ll probably still be frustrated that you had to pay $800 dollars for a deductible, and that is where subrogation begins.

What Is Subrogation

Subrogation is the insurance company’s term for compensation or reimbursement. In this scenario, your insurance company paid for damages, medical expenses, and lost wages for an accident that was not their policyholder’s (your) fault. Subrogation, therefore, is the process your insurance company takes to get reimbursement from the party responsible for their policyholder’s accident when it was not their fault. In your situation, the insurance company will subrogate damages from the person who ran the red light.

Why Subrogation is Good For You

Usually insurance companies will talk to other insurance companies with a business to business attitude. Sometimes insurance companies will have to hire lawyers to settle disputes about the facts surrounding the case and who is actually at fault. You (the policyholder) will never have to involve yourself in this process, however the insurance company will be representing you. You can keep your eyes shut from subrogation, but it’s best to be aware. When your insurance company is subrogating there are some benefits you ought to know about:

  • When an insurance company is seeking reimbursement, if they get the money back then you are entitled to compensation for the deductible you paid
  • If the insurance company subrogates all the damages, then your policy should not be subjected to premium increases (or at least as much as if they were stuck paying the damages)

Your insurance company is representing you when they subrogate damages from your incident. It’s important to make sure they are playing fair and keeping you informed. If you are unsure or curious about subrogation around you case, contact us for a free consultation.