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What is Subrogation?

Posted on in Car Accidents
When you sustain injuries or damages in a Springfield car accident, the process of recovering compensation can be incredibly complex. Most people do not have to deal with car insurance terms on a daily basis, so when the insurance adjusters start calling, the things they say can be confusing. One of the terms you may here is “subrogation.” Understanding what this is could be an important part of your car accident claim, particularly if you are not the at-fault driver.

Defining subrogation

In legal terms, subrogation is when one party assumes the legal rights of another party to collect damages or a debt. This is not something that most consumers have to deal with. Rather, subrogation takes place behind the scenes between two insurance companies. As a consumer, subrogation is most likely to come up after you have been involved in a car accident when you carry “first party” car insurance to cover your losses.

This includes:

  • Collision and comprehensive insurance to cover damage to your own car.
  • Personal injury protection and medical payments insurance that cover your injuries.
  • Uninsured/underinsured motorist insurance to protect you when the at-fault driver does not have coverage or has insufficient coverage.

Many people wonder why their own insurance company would have to use subrogation to get money from an at-fault driver’s insurance carrier. Would that driver’s carrier not be automatically responsible for covering the expenses?

When do claims enter subrogation?

Many people wonder why their own insurance company would have to use subrogation to get money from an at-fault driver’s insurance carrier. Would that driver’s carrier not be automatically responsible for covering the expenses?

In some cases, this does not happen right away. For example, let’s say you are at a four-way stop sign and proceed through after coming to a stop, but another driver runs another stop sign and strikes you, causing $10,000 in damage. They will likely be at fault. However, if they dispute that they are at fault, they could delay a claim. Because you need your car fixed quickly, you file a claim under your own insurance comprehensive coverage and pay a $1,000 deductible.

Using subrogation, your insurance carrier will then file a claim against the at-fault driver’s insurance carrier to recover the $10,000. Your insurance carrier will keep the $9,000 they paid to fix the damages and reimburse you for the $1,000 deductible.

Does the insurance carrier tell you about subrogation?

Yes, your insurance carrier must tell you if they are going to subrogate your claim with the at-fault driver’s carrier. If they do this, the amount you paid as a deductible must be included in the subrogation amount they are seeking to recover. Essentially, your carrier has to look out for both you as well as themselves.

Subrogation is a routine procedure that is typically minimal in process, so you will not have much to do personally. Always keep receipts of how much you pay out-of-pocket for damages after a car accident takes place.

Car accidents are common in Illinois

Car accidents happen all the time in Illinois. According to the state Department of Transportation, there were 311,679 total motor vehicle crashes in Illinois during the latest reporting year. Out of those incidents, there were:

  • 66,889 total injury crashes
  • 998 fatal crashes

While we do not have statistics on the total number of claims that involved subrogation, we do know that this is a common occurrence, and you, as the consumer, will not have any added burdens outside of the normal complexities of a car accident case.

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If you or a loved one has been injured in a car accident, contact our office today to schedule a free consultation with one of our experienced attorneys.

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