Reader question:
What’s ‘subrogation’ in regards to car insurance?
Gurpreet
Ummmm…
No, just kidding, I know.
Say you get in a car wreck, and it wasn’t your fault. Maybe your car gets damaged and you have to wear a neck brace. No fun. So you call your car insurance company up to get reimbursed for your expenses and file a claim. Of course, they investigate the whole incident, and upon finding out that the other driver was at fault, they go looking for money at that guy’s insurance company. That’s called subrogation.
Basically, it’s when a car insurance company tries to get reimbursement from who’s really responsible after it has already paid out to you. Once your insurance company has paid your claim, it gets to take up your sword, as it were, and sue the negligent party for you. Some, but not all, insurers subrogate medical bills, and when they do they might do so against the other person’s insurance–but then they might do it against your own health insurance.
Included in subrogation is settlement for collision in damage claims. Your insurer might get you to sign an agreement assigning them subrogation rights. You might have to pay a deductible up front, which will be refunded once the company acquires its money through subrogation.
Cheers,
Fashun Guadarrama
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