SUBROGATION: What is it and how does it impact you?

What does subrogation have to do with your insurance policy?

As it relates to insurance, subrogation is when your insurance company stands in for you and assumes your right to pursue a “wrong-doer” for your insurance claim, if there is in fact a person or company that is liable for the damages caused.

If you have filed an insurance claim with your insurance company and have received payment for loss and damage, your insurance company can then pursue the party that caused the loss and damage. Essentially, in an attempt to recover the money paid to you, your company pursues the liable party while representing your interests. Your insurance policy contract includes a section which states your insurance company has a legal right to use subrogation when applicable.

What is an example of a subrogation claim?

If you were to submit a homeowner claim under your insurance policy for a vehicle, owned by someone else, that loses control, strikes your home and your insurance carrier pays you for the resulting loss and damage; your insurance carrier will then seek reimbursement either from the vehicle owners liability insurance carrier, the vehicle owner directly, or by going to court on your behalf.

Can you do anything to assist with a subrogation claim?

You sure can! While your property adjuster will be there to help lead you through the entire claim process, they weren’t there when the loss occurred. So, you can take photos of the damage prior to anything being removed, secured or cleaned up. You can also obtain contact information from the at-fault party and their insurance information, if available.

In a case of loss or damage caused by any type of appliance or other product that causes damage to your property, that item should be preserved until your adjuster arrives and can properly secure it. Never discard potential evidence or allow anyone to take items from the loss scene until your adjuster advises you to do so.

How do you benefit from subrogation?

When you make an insurance claim for which another party is responsible, it is in your best interest for your insurance company to try to recover the amount of damages paid. Subrogation recovery will mean that you may receive reimbursement of part, or all of your policy deductible that was applied to your claim. Subrogation recovery also aids greatly in keeping the cost of insurance premiums down for all policyholders.