Article 7 of 7 in Car Insurance Claim Settlement
Subrogation can b a difficult legal concept, but is something you should understand if you receive money from your insurance company. If you are in a car accident and your car insurance policy covers you for both the damage to your car and your personal injuries, you call your insurance company, file a claim, and they pay all of your expenses relating to the accident. If the other party in the accident caused the damage, then your insurance carrier can get reimbursement from the other driver's insurance company since its insured was actually at fault for the accident. This process of reimbursing your insurance company for the bills it covered is known as subrogation.Subrogation is typically done behind the scenes and without much effort from you, however, you should know your subrogation rights just in case there is a mistake that costs you money or the right to file a future claim.
What is Subrogation?
Subrogation refers to an insurance company seeking reimbursement from the person or entity legally responsible for an accident after the insurer has paid out money on behalf of its insured. This could include any money paid out for property damage, deductible amounts, diminished value, pain and suffering, loss of consortium, etc. The definition of subrogation is the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.
If the accident was your fault, you are responsible for the damages caused. The other driver's insurance company will likely subrogate against you or your insurance company to pay for the damage to their insured's car and/or medical bills. If you need to negotiate with an insurance company about any damages or subrogation rights, consult with an attorney.
How Subrogation Works
The general rule for subrogation is that after paying your claim, your insurer is subrogated to the rights of your policy and can step into your shoes to go after or sue the negligent party on your behalf.
Whether you car or health insurance company subrogates, you will receive paperwork detailing the amount of money the insurance company has paid for your accident or injury claim, and explaining the company's subrogation rights should you later recover for those same injuries or damages in a lawsuit.
What Is Waiver of Subrogation?
Some contractual agreements, require you to waive your right of subrogation (and therefore your insurance company's rights) against the other party in the event of a claim. A waiver of subrogation prevents your auto insurance carrier from pursuing damages from a specified party. If you are ever asked to sign a waiver of subrogation you need to consider the following:
If you are faced with a waiver of subrogation clause in a contract, it is a good idea to consult an attorney before waiving any rights or limiting the amount of damages you can recover.
How to Manage a Subrogation Claim
It is best to cooperate with your insurer when a subrogation claim has been made. Of course, this is within reason as you never want to sign away all your rights in a claim. A subrogation claim usually happens behind the scene. In most cases, the two insurance companies are going back and forth to verify what happened and what amounts have been paid out. Unfortunately, this takes time. Be patient, but keep in close contact with your claims person so your claim doesn't get pushed to the bottom of the pile! If you working on your own to recover your money and find that you are getting nowhere, contact an attorney that can help you find your recovery.
For more information about auto insurance claims, check out the following articles:
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