What Does Subrogation Mean In The Insurance World?

Tue, Dec 15, 2015

Personal Injury

11613922755_cd45c27e65_bGood old car insurance. It’ll be there for you. Well, it should be. In addition, subrogation is a way it can be. But what is subrogation?

So let’s say you are rear-ended at a stoplight. Usually this is considered the fault of the person rear-ending you. They should pay for everything— damage to your car, your injuries, etc. Right? Not always. For one thing, injuries in the state of Florida come under the PIP law, which means your own insurance pays first for your injuries. That is a claim right there on your insurance. You might be surprised to hear this—but this is how Florida works. We recently wrote in-depth about PIP in Florida—read more here.

So now, you know that the other person doesn’t cover your injuries automatically. Bummer. Ok, so your car surely is going to be fixed at no expense to you. Well, it should be theoretically. The person who hit you should contact their insurance and the insurance contacts you, the adjuster magically appears, and you are all on your way in a flash. Well, in a perfect world, that’s what happens. However, what if the person has Joe-Schmo insurance and you have never heard of them and the Internet seems to be quiet on the company or perhaps the person wrote the 1-800 number down wrong. What if the person insists they will pay personally and then they take a powder and you can’t find them? What if their adjuster catches a weeklong flu like his co-workers, you can’t get your car fixed, and you have to go to work? Worse yet—what if the person who hits you doesn’t have insurance or takes off and you didn’t get their info. Then what? How are you getting your car fixed? Well, that is when subrogation comes into play.

With subrogation, your insurance company will fix your car assuming you have collision coverage. You will be responsible for your deductible. So you are out that money and you have a claim on your insurance. However, you can get to work a lot faster than waiting out the other person. Then, your insurance is going to say that they shouldn’t have had to pay and do their best to get the money from the other company (or perhaps the other person if applicable). That may work out fine and perhaps you will get your deductible back, but you can’t always count on that. However, insurance companies are great at looking out for themselves and are sure to try their best. They don’t want to lose the money after all. This is how subrogation works.

It is sometimes worthwhile to investigate all possible options when it comes to damage to your car (that is clearly not your fault) prior to relying on subrogation. Do an internet search; call the other person and company quite often, etc. You want to be sure that you have done your best to get the other company to pay for damage that their client caused. While your injuries are a lost cause until a certain threshold, you should be able to get your car fixed by the proper party.

All of this information should also encourage you to be sure you have a good policy that protects you and others to the best of your financial ability and your circumstances. A good insurance agent can help with this. Just remember, if you don’t carry collision coverage, you won’t be getting your car fixed through your insurer, and Joe-Schmo insurance may not be around to help you either.

Attorney Christopher D. Smith, Sr. is designated a Board Certified Consumer Bankruptcy Lawyer by the American Board of Certification.  SmithLaw is located in Lakewood Ranch, Florida.  Attorney Smith concentrates on bankruptcy, civil litigation, probate, estate planning, and elder exploitation cases in the Sarasota and Bradenton area.  Call 941-202-2222 to learn more.  SmithLaw offers free consultations in certain areas, including consumer bankruptcy, probate, and personal injury matters.

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