Nov 01

What is Subrogation?

Subrogation refers to the process that an insurer uses to pursue a third party that caused some type of insurance loss to the insured. This is done as a means to recover claim amount paid to the insured for the loss.

Subrogation Can Matter to you if:

  • You have some type of covered loss
  • There’s another party that is responsible for the damages or part of them. For example, another party may be responsible for causing a car accident you were in but you have already submitted a claim

The insurance company may pay out the claim to you but seek reimbursement from the party that caused the loss or damages to occur in the first place. The laws of your state the circumstances of the loss and the provisions in your insurance policy would all be factors that go into this process. If the instance company wants to pursue subrogation, then they will work to get damages from the other party. This may be damages paid by the insurance company or by you.    The cists to you is usually your deductible by may also include amounts that are over the policy limit and paid put by the insurance company.

This can work the other way around and if you’re at fault the other party and the insurance company may seek out damages against you. This is usually done with your insurance company and your company will review the facts of the investigation to see if you are liable for any damages. In some cases both parties may pay a share of the damages because the laws can be so different. It’s often difficult to determine who should pay in some cases. An example would be one party paying 60% of a claim and another 40%. In this case both insurance companies may take out subrogation claims against each other so both parties’ claims are paid for. You may be required to participate and cooperate in the claims processes this will make things run smoothly. You may be required to show facts or evidence which can help with the entire process.

The Insurance Company

During the subrogation process the insurance company may:

  • Work to produce valid subrogation claims so that money owed is given to the correct parties
  • Keep you informed about the entire process and let you know about significant developments in the claim
  • Try to produce quick reimbursements
  • Ask you questions to clarify things

There are many circumstances that come into play when subrogation is involved and it’s often not a simple process. It can become complicated and the amount of money can vary a great deal. The laws of various states can complicate the whole process even further. The amount of money claimed, the amount recovered and state laws can all come into play when it comes to the subrogation process. Your insurance company can help you understand more about subrogation and how it impacts you. The entire process may go smoothly or it may not it all depends upon the circumstances.

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