If you are running an insurance business, or operate a self-insured entity, you have financial obligations to the company. Of course, you need to respond to claims with honesty and integrity, but you also need to minimize payouts to ensure the ongoing solvency of your company.
While insurance defense to questionable claims is certainly one important part of the equation, another way to help maximize profits is often overlooked: subrogation.
Subrogation is a legal principle of equity in which an insurer "steps into the shoes" of the insured. The insurer assumes the rights of the insured in subrogation, and can pursue financial recovery from negligent third parties who bear responsibility for losses suffered by the insured; in other words, the insurer has a right to recover for payments made to the insured from those who caused the loss.
Subrogation is a form of indemnity that can arise in many types of modern insurance cases. Fire damage claims and auto accidents are two of the more common reasons an insurance provider may have to get in touch with subrogation lawyers.
Fire damage claims
Some fires are truly caused by an act of God, but many others would not have been sparked if not for human recklessness. Perhaps the most obvious type of case in which fire damage can be attributed to some third party is in instances of arson. Even when a fire was not set intentionally, it is entirely possible that it was ignited due to negligence. Perhaps there was a product defect in a furnace or stove. Or, maybe a neighbor let a bonfire get out of control. In these situations, a subrogation claim may be appropriate against the manufacturer and the neighbor, respectively.
Typically in an auto accident, the at-fault driver's insurer pays for resulting property damage and medical bills. Yet, auto accidents can be complicated, it is not always immediately apparent to what extent each driver is responsible for causing the accident and there are a variety of other reasons why payment from the other insurer can be delayed. Thus, the insured may file a claim with his or her own insurer, and in turn the insurer later seeks reimbursement from the other company, the at-fault driver, or other third parties whose negligence contributed to the accident.
Call an insurance defense lawyer to learn more
While most insurance providers are not strangers to occasional litigation, subrogation claims can be intimidating because they often deal with issues and legal causes of action outside the scope of typical insurance defense cases. With the right legal help though, subrogation is an effective legal tool for insurers to capture as much value as possible. If you work for an insurance company or a self-insured entity and believe you may need to pursue subrogation, get in touch with an attorney today to explore your legal options.
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