What is Subrogation?

Posted on: Wednesday, October 23, 2013

Have you ever been in an accident in which you’ve been injured, or concerned that you might have suffered an injury? You probably went to an emergency room and perhaps had x-rays, at the very least. This, unfortunately, is one of the most common everyday situations. You submit a claim to your insurer, who will usually pay for the costs of the visit to the ER. However, at some point your insurer will contact you to discuss the particulars of the incident which brought you to file a claim. Your company needs to determine who is to blame for the injuries. They will ask if you are pursuing, or at least considering litigation from whomever was responsible. They are, effectively, determining if they need to subrogate for you in this matter. 

What is subrogation?

In the simplest of terms, subrogation occurs when one party stands in for, and accepts the responsibilities of, another. In insurance, subrogation is most often applied when a company demands reimbursement from the party who stands legally responsible for an accident. This usually comes after the insurer has already paid out money on behalf of its insured client. This could include any sum paid out for any number of a variety of legal damages. 

Frequently, subrogation is something that the insured never has to think about. It happens behind the scenes, between representatives of two insurance agencies. After paying your claim, your insurer is subrogated to the rights of your policy and, on your behalf, seeks any and all restitution from the negligent party. Of course, this works both ways. If you caused the accident, you are responsible for any and all damages. In this case, the claimant’s insurance company will likely subrogate against you or your insurance company to pay restitution.

How does subrogation work?

The subrogation process begins by digging for all the pertinent information from the other party. Assuming that you are the injured party, once your insurance provider settles your claim for damages, your adjustor forwards the information to the subrogation department. They will then attempt to contact the at-fault party, or their insurance company, to seek restitution. If you had to pay your deductible, they will also request that money back when the other driver or their insurance company pays the subrogation claim. Usually, one or two phone calls to the other insurance company suffice. 

You may be asked to sign a subrogation release that assigns your right to recover money from the responsible person to your insurance carrier. This is an issue which you probably should not do without consulting an attorney. Waivers of subrogation will also waive your right to sue the other party for damages. Many would advise that waivers should be mutual. If you are waiving your rights of subrogation, the other parties should waive their rights against you as well.

The study of subrogation, and all of its classifications, can be highly complex. If you have a situation which is not a typical, straightforward case of insurance subrogation, consult with a professional. Know your rights.

Want to know more?

At Core Benefits Group, we have answers. Contact us or give us a call at 1-877-214-2969.  

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