An insurance policy you own is a promise that, if something bad occurs, the company on the other end of the policy will make good in a timely fashion. If you get hurt while working, for example, your employer's workers compensation insurance agrees to pay for medical services. Employment lawyers handle the details; you just get fixed up.

But since determining who is financially accountable for services or repairs is sometimes a tedious, lengthy affair – and delay in some cases compounds the damage to the victim – insurance companies usually opt to pay up front and figure out the blame afterward. They then need a way to regain the costs if, when all is said and done, they weren't responsible for the expense.

Can You Give an Example?

You rush into the emergency room with a deeply cut finger. You give the nurse your health insurance card and he writes down your plan details. You get taken care of and your insurer is billed for the expenses. But on the following afternoon, when you get to your place of employment – where the injury happened – you are given workers compensation paperwork to turn in. Your workers comp policy is in fact responsible for the expenses, not your health insurance. It has a vested interest in getting that money back in some way.

How Subrogation Works

This is where subrogation comes in. It is the process that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. Some insurance firms have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Usually, only you can sue for damages to your person or property. But under subrogation law, your insurer is considered to have some of your rights in exchange for having taken care of the damages. It can go after the money that was originally due to you, because it has covered the amount already.

How Does This Affect Policyholders?

For a start, if your insurance policy stipulated a deductible, it wasn't just your insurer who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might choose to recover its expenses by ballooning your premiums. On the other hand, if it knows which cases it is owed and goes after those cases enthusiastically, it is doing you a favor as well as itself. If all is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found one-half at fault), you'll typically get half your deductible back, depending on your state laws.

Moreover, if the total cost of an accident is over your maximum coverage amount, you could be in for a stiff bill. If your insurance company or its property damage lawyers, such as criminal law defense lawyer Hillsboro OR, pursue subrogation and wins, it will recover your losses as well as its own.

All insurers are not created equal. When comparing, it's worth researching the reputations of competing firms to determine if they pursue valid subrogation claims; if they resolve those claims fast; if they keep their clients informed as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your funding back and move on with your life. If, instead, an insurer has a record of paying out claims that aren't its responsibility and then protecting its profit margin by raising your premiums, you should keep looking.

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