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Auto Insurance Claims Subrogation

Auto insurance claims subrogation is a process that insurers sometimes go through after a claim has already been paid. Subrogation is the name of a specific course of action insurance companies actually have to take more often than many people realize. To better illustrate its meaning, it is helpful to give an example of a situation in which auto insurance subrogation can often come into play.

As an insured driver, you get into a car accident and it is clear that the accident was not your fault. The car you were driving is totaled and you also have some significant personal injuries that require medical treatment. As is the normal procedure following an auto accident, you contact your insurance company and tell them what happened in order to get a claim opened. The insurance provider covers you for both the property damage to your car and for the expenses related to your injuries sustained in the accident. This is pretty much standard procedure, and is one of the reasons why insurance is expensive.

Later on, the insurance company finds out in a more official way that the other party involved in the accident was to blame for the collision and has insurance that will cover the financial damages. Because of this information, your insurer contacts that company seeking out reimbursement for the money it paid out since that company's client was at fault in the collision. This is called subrogation.

Insurance Subrogation Defined

Subrogation refers to a specific action taken by an insurance company trying to recover its own losses in an accident claim after those losses have already been paid out. Subrogation means seeking reimbursement from the party negligent or legally responsible for the accident. What the term means is that once they have paid out a claim on your behalf, an insurance company is "subrogated" to the rights of your policy and entitled to act on your behalf in pursuit of repayment.

Some companies subrogate for medical bills, although not all of them do. When companies do subrogate after paying out a claim it could be against the other driver's liability policy; but it could also be against your own personal health insurance policy or against any other coverage that could potentially cover the claim.

Subrogation and Property Damage Claims

Subrogation can also be employed in property damage claims. Your insurer may quickly settle your claim when your vehicle has been damaged or destroyed due to someone else's negligence. In most cases, insurers will have drivers sign a subrogation release for use in these circumstances. This release form assigns your right of recovery against that negligent driver to them. Many insurers will not wait to settle the claims of their insured policy holders, until after they get paid by the other drivers' providers. They will typically settle the original claim fairly quickly and will collect your deductible when they subrogate, promising to return it to you once they get paid from the other insurance company on the subrogation claim.

Of course, all of this can happen in reverse as well. In other words, if the accident you were involved in was your fault, the other driver's mandatory car insurance company will more than likely subrogate against you or your insurance company to pay for the losses they sustained in paying out their client's claim. You are financially responsible for any property and injury damages caused by an accident. The medical bills and the damages to the other driver's car will ultimately end up being your responsibility. If you are insured, your insurance provider will cover these damages but you will have to pay any deductible that might be included in that part of your policy.

Claims subrogation is not an uncommon occurrence. In essence, it is just a part of the back and forth process between insurance companies when accidents happen. They are exchanging information, trying to determine exactly what happened and who was to blame. In states where damages are split between parties based on degree of fault, they may negotiate these details over time. Drivers who end up having to pay damages out of pocket as a result of these proceeding whether because they're uninsured or because their coverage wasn't enough to handle all costs should know that you can often negotiate the damages being claimed as well as the payment schedule. Those who are uninsured need to contact a car accident lawyer for proper representation in these proceedings. Make sure you are represented and that you do not get taken advantage of.

When a subrogation claim has been made, usually it is a good idea to cooperate with the insurance company as long as they are operating within reason. Understanding auto insurance claims subrogation helps you to be calm in dealing with these situations and realizing that they usually can be worked out.


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