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How Does Subrogation Affect Your Insurance Claim?

Have you ever been in a car wreck that was not your fault? Was the negligent party’s insurance company slow to get back to you? Maybe you decided to just file the claim with your own insurance provider in order to speed up the process of getting your car drivable again. So you paid the deductible, lets say $500, and your insurance company spent thousands of dollars to get your car fixed. Finally, after a weeks of waiting, you got back on the road, smiling, your hands out the window, feeling like you’re on top of the world yet again. However, your insurance company still has some work to do: subrogation.

What Is Subrogation?

Subrogation is part of the law that protects insurance companies, banks, and other loan entities from unjust enrichment. This means an insurance company that paid damages to an insured person not at fault for an accident has the right to subrogate the damages from the third party (negligent party) or the third party’s insurance provider. In short, subrogation is simply reimbursement.

If subrogation did not exist the insured person could collect damages from the third party and their insurance company. This would be unjust enrichment. Insurance companies only subrogate when the insurance company has paid damages on behalf of a person whose damages were not their fault. The insurer steps in and represents the insured person and sues the negligent party to get their money back.

To continue our example, your insurance company that paid money to the insured (you) for the wreck that was not your fault, has the right to subrogate that amount of money from the third-party who is at fault. Your insurance company will be talking to the third party’s insurance company to get their money reimbursed. More importantly, the insurance company can get your paid-deductible refunded back to you because you were not responsible for the wreck and should not have to pay the deductible. It’s also important for insurance companies to subrogate this money because it will keep your rates and premiums low.

Have a Lawyer Help You With Your Subrogation Case

Having a lawyer when your insurance company is working through their subrogation process won’t leave you in the dark. The insurance company needs to subrogate the money it had to pay on your behalf but you also need to receive any damages you had to pay out of pocket. The insurance company is stepping in and representing you to get their money back. It’s important to make sure they are being fair in this process. A personal injury lawyer understands this process and can help you get any the damages you paid out of pocket.