What is subrogation?
Subrogation is a legal process where one party seeking compensation for loss assigns its claim to another party. The second party has the right to collect from the person or entity that caused the original loss.
For example, if your car is damaged in an accident and you make a claim on your insurance policy, your insurance company will pay for the repairs. If the insurance company believes another driver was at fault, it may seek reimbursement (subrogation) from that driver’s insurance company.
Sometimes, an insurance company may seek reimbursement directly from the person who caused the loss. For example, if you are injured in an accident and claim on your health insurance policy, your insurance company may seek reimbursement from the at-fault driver.
The law of subrogation is complex, and strict time limits apply. If you do not take action within the required timeframe, you may lose your right to have your claim heard by a court or tribunal. If an insurance company contacts you about a subrogation claim, you should seek legal advice as soon as possible.
How to handle a subrogation claim
You must contact your insurance company if you’re dealing with a subrogation claim. You will need to provide them with some information, such as the date of the accident, the other driver’s insurance information, and your policy number. Once you have done that, you will need to wait for a claim adjuster to contact you.
Notify your insurer
If you have been involved in an accident and the other party was at fault, you may be entitled to compensation from their insurance company. This process is known as subrogation.
To begin the subrogation process, you must notify your insurance company of the accident and provide them with any relevant information. Your insurer will then contact the other party to start the claims process.
Both insurance companies will investigate the accident during the claims process and determine who was at fault. If it is determined that the other party was at fault, their insurance company will be responsible for paying compensation to you.
In some cases, the two insurance companies may agree on who was at fault without going through a formal investigation. If this happens, you will not need to do anything further and will receive your compensation from the other party’s insurer.
However, if the two insurance companies cannot agree on who was at fault or if there is some dispute over the amount of compensation that should be paid, the matter may need to be resolved in court. If this happens, you must provide evidence to support your compensation claim.
The subrogation process can be complex and time-consuming, but it is important to remember that you are entitled to compensation if you have been injured through no fault. You should speak to a personal injury lawyer for advice if you have questions about your rights or how to proceed with a claim.
Cooperate with your insurer
If your insurance company pays for your damages, it will likely initiate a subrogation claim against the at-fault driver’s insurance company. This means that your insurer will attempt to recover the amount it paid you from the other driver’s insurer.
To help your insurer with its subrogation claim, you should cooperate fully and provide any requested information or documents. You should also avoid giving statements or signing documents for the other driver’s insurance company without consulting your insurer.
If you believe that another party may be liable for damages related to an injury you’ve suffered, you’ll need to take steps to gather evidence to support your claim. Depending on the situation, this may involve taking photographs, obtaining witness statements, or retaining experts to review evidence. This can be time-consuming and expensive, but it’s essential to building a strong subrogation claim.
Speak with an attorney
Suppose you have collision coverage on your insurance policy. You might consider speaking with an attorney if the other driver was clearly at fault and is uninsured or underinsured. In that case, your insurer may also subrogate (or “step into your shoes”) and sue the other driver to recover the amount paid out on your behalf.
If you’re considering hiring an attorney, ask whether they regularly handle subrogation cases and whether the firm has experience going up against the insurance company involved in your case.
How to avoid a subrogation claim
Subrogation is the process of one insurance company seeking reimbursement from another insurance company for the amount they paid out on a claim. To avoid a subrogation claim, you should ensure enough insurance to cover the damages. You should also avoid making any statements that could be used against you in a subrogation claim.
Review your policy
Subrogation is a legal right that allows your insurance company to recover damages you have caused to another party. To avoid a subrogation claim, reviewing your insurance policy and ensuring you understand your coverage is important. Contact your insurance agent or company for clarification if you are unsure about your coverage.
Most policies will cover damages caused by your negligence, but there may be some exclusions or limits on what is covered. For example, many policies will not cover damages caused by intentional acts or illegal activities. It is important to be familiar with the terms of your policy so that you can avoid any potential claims.
Understand your coverage
Most insurance policies contain a clause specifying that the insurer has the right to seek reimbursement (referred to as “subrogation”) from a third party if the policyholder is compensated for a loss by that third party.
For example, assume you are involved in a car accident caused by another driver. Your own insurance company pays to repair your car. Later, your insurer sues the other driver to recover the amount it paid to repair your car. This is an example of subrogation.
In some cases, your insurer may waive its right of subrogation. For example, suppose you have collision coverage on your car insurance policy. In that case, your insurer may waive its right of subrogation against the at-fault driver if you agree to accept a smaller settlement from the at-fault driver’s insurance company.
If you have questions about whether your insurer has the right to seek reimbursement from a third party, you should check your policy or contact your insurer.
Keep good records
To avoid a subrogation claim, keeping good records of all communication with your insurance company is important. This includes any correspondence, phone calls, or email exchanges. By doing so, you will be able to prove that you followed their instructions and acted in good faith.
It is also important to keep good records of your medical treatment. This includes receipts, appointments, and communication with your doctor. If you miss work due to your injuries, keep records of this. Doing so can prove the extent of your injuries and how they have impacted your life.