What is a Subrogation Action?

Insurance subrogation action is an important term to know if you are ever injured. If you suffer an injury and submit your medical bill to your health insurer, your insurance will usually pay for the costs of treating your injuries. However, sometimes this conversation between you and your insurance company isn’t that simple. Your insurer might want to know if there was a third party involved in your injuries, and if this third party should be responsible for your injury compensation. This concept is called subrogation, and insurance companies use this action to help relieve their duty of paying all of your bills. A subrogation claim allows the other insurance company or government agency, also known as the “collateral source,” to stand in the shoes of the injured party.

What Types of Policies Can Subrogation Apply to?

Subrogation can apply to many different types of policies, whether personal or commercial. Your car insurance company could try to seek reimbursement from the at-fault party’s insurance company. If you slipped and fell on another party’s property, that person or company’s insurance should pay for a chunk of your injuries or damages.

Why is Subrogation Important?

Subrogation action has become very important in the insurance industry. Any money that has been recovered through the subrogation process will go directly to the insurance company’s bottom line; this means that subrogation greatly benefits companies. The more subrogation claims that a company has made over time, the higher the percentages of loss payment recoveries. If a company has an effective subrogation section, they can actually offer lower premiums to their policyholders.

If you would like to know more about subrogation, contact our attorneys at Anderson & Riddle, LLP today for a free consultation.