What Is a Subrogation Claim?
Generally, the subrogation process is the right of an insurance company to recover the amount it has paid on a claim from the at-fault party. There are many moving parts and intricate processes when dealing with insurance claims. Subrogation is vital to that process, especially in personal injury claims.
In this article, we will discuss the process and importance of subrogation, the different types of subrogation, and the pros and cons policyholders may face when dealing with subrogation claims.
The Process of Subrogation
Steps Involved in a Subrogation Claim
The subrogation process typically begins when your insurance company pays your claim. The party liable for causing the accident will be contacted by your insurance company to cover or pay any expenses they subrogated for you, whether car repairs, rentals, or even medical expenses.
Your insurance company may cover your losses first; that's what insurance is for. However, your insurance provider will still send a subrogation claim to the at-fault party's provider for reimbursement. This process may involve negotiation, settlement discussions, and sometimes even legal action from a Los Angeles personal injury lawyer.
Importance of Subrogation in Insurance
Subrogation plays a crucial role in accounting. It prohibits the injured party from profiting more than what is accounted for. For example, If your medical insurance paid for your medical bills, part of your settlement would be used to pay them back. You would not be able to pocket those damages. It prevents the unjust enrichment of one party at the expense of another and ensures that the financial burden of an accident is covered by those responsible.
Types of Subrogation Claims
Subrogation applies to various types of insurance. Let's delve into two common examples: health and auto insurance.
Subrogation in Health Insurance
When Subrogation Occurs in Health Insurance
Subrogation is common in health insurance, especially when another party's negligence causes injuries. For instance, if you're injured in a car accident and require medical treatment, your health insurer might pay your medical bills first. However, if the other driver is at fault, your insurer could seek reimbursement from the other driver's auto insurer or the driver themselves.
Subrogation in Auto Insurance
Example of Subrogation in Auto Insurance
Let's use this case as an example. You're involved in a car crash caused by another driver. Your auto insurance company pays for your vehicle's repairs and even lends you a rental car while your car is in the shop. The insurer can then file a subrogation claim against the at-fault driver's insurance company to recover the rentals and vehicle repairs costs.
The Role of Subrogation in Insurance Policyholder Rights
Rights of the Policyholder
As a policyholder, you have certain rights during the subrogation process. These include the right to be informed about the progress of the subrogation claim and the right to receive any excess recovery after your insurer has been reimbursed.
How Subrogation Affects Policyholders
Subrogation can have several effects on policyholders. Accident victims can begin the healing process sooner, as your insurer pays your claim first before seeking recovery from the at-fault party. However, you may be required to assist your insurer in the subrogation process, which could involve providing information or participating in legal proceedings.
Pros and Cons of Subrogation
Advantages of Subrogation
One of the primary benefits or pros of subrogation is cost reduction. By seeking reimbursement from the at-fault party, insurance companies can keep their cost and loss ratios lower, which helps to control insurance premiums for everyone.
Protection Against Unfair Claims
Subrogation also safeguards against false or exaggerated claims, as the at-fault party's insurer will review the claim during the subrogation process.
Disadvantages of Subrogation
On the downside, subrogation claims can sometimes result in delays. Recovering costs from the at-fault party can take time, especially if the case goes to court.
Subrogation can also lead to legal complications, particularly if the at-fault party disputes their liability or the amount claimed. Also, if your insurance company does not submit a subrogation claim, the burden is now on you to recover all compensatory damages from the at-fault party.
Let West Coast Trial Lawyers Deal With The Insurance Company
After a car accident, the last thought on your mind should be, “Did I follow up on that subrogation claim?” Your priorities should be having a speedy and full recovery, not negotiating with insurance companies. A skilled personal injury lawyer can help you navigate the claims process better than anyone.
At West Coast Trial Lawyers, we aim to help you win the highest settlement possible and hold the negligent driver accountable. WCTL has expert attorneys ready to help you with your subrogation claim.
They know what they're doing, very well. Not only did I not make a single phone call from the day I hired them, but I also received calls from their case managers and paralegals who want to make sure my treatment was going well. They whole team took care of me. Thank you WCTL for taking full responsibility of my case and getting me an amazing settlement.
I can say with confidence that this team is the best in the business. . . . Dean took the time to really listen and hear me out. He assured me that he was going to move mountains because he believed in me, and he ended up doing just that. I’ve never met a more focused and passionate attorney in my life. If you’re looking for a firm that treats its clients with the utmost respect and care, calling WCTL is a no-brainer. I wouldn't think twice about working with them again in the future.