Subrogation claims are common in the world of insurance, but you may never have heard about them, or know how they might affect you.  Read on to find out what subrogation is, how it relates to your insurance, and why it matters, particularly if you are involved in a personal injury case.  

What is a subrogation claim?

Put simply, subrogation is the act of one person or party standing in for another person or party. In the context of insurance, it refers to the process whereby your insurance company pays out money in a situation where losses to you, its insured, were caused by another at-fault party, and then stands in your place, legally speaking, to recover what it paid from the party that was actually responsible.  This process helps you as a policyholder because it allows your insurance company to act on your behalf and negotiate with the insurance company for the at-fault party, so you do not have to take on the at-fault party directly. Subrogation is also supposed to help keep insurance rates low because the insurance company can be reimbursed for what it paid out for a claim that was not caused by your action as an insured.

Consider, for example, if your vehicle is damaged in an accident that is caused by someone else. You file a claim with your car insurance company, which then investigates your claim.  If the insurance company approves your claim, it compensates you according to the terms of your policy agreement. After paying your claim, though, the insurance company is entitled to take legal action against the at-fault driver to recover the amount that it paid to you, which is called a subrogation claim. If the insurance company is successful in its subrogation claim, it divides the amount recovered with you to reimburse you for any deductible that you paid.

How does a subrogation claim affect you?

Generally, you do not have much to do directly with a subrogation claim, as the process largely takes place between your insurance company and the insurance company for the at-fault party.  However, your insurance company’s right of subrogation can have a significant impact on what you recover if you have filed a personal injury case as a result of an accident.  A subrogation claim acts as a lien against any settlement amount you might be awarded in a personal injury case. According to South Dakota law, subrogation claims allow insurance companies to be paid before their own policyholders when settlement amounts are distributed. Depending on the size of the subrogation claim and the amount of liability insurance that the at-fault party has, your entire settlement amount could go to the insurance company as part of a subrogation claim.

Your rights as an injured person

An attorney can help you better understand your rights as an injured person and how subrogation claims work. Hiring a knowledgeable personal injury attorney in South Dakota can help you maximize your recovery amount and circumvent paying a subrogation claim you do not owe or negotiate and reduce an otherwise valid subrogation claim. An attorney can help you identify your options if a subrogation claim is in place, and may be able to work with your insurance company from the beginning so you can recover as much as possible for your personal injury claim.

For more information

You have rights when dealing with insurance companies. If you are facing a subrogation claim or you have any concerns about how you have been treated by an insurance provider, then contact Turbak Law today at (866) 231-0914 to speak with an attorney.