Getting into a car accident and filing a claim may mean dealing with your insurance provider to cover costs as part of the incident. During this process, you may come across a funny word called “surrogacy”. In this guide, we break down what insurance subrogation means and how it works.
what is a subrogation insurance claim?
If it’s a claim and you see “subrogation,” it’s natural to wonder what insurance subrogation is. According to the Merriam-Webster dictionary, subrogation is “the assumption by a third party (such as a second creditor or an insurance company) of another’s legal right to collect a debt or damages.” (Fun fact: This term was first used in the 15th century, notes Merriam-Webster.)
In other words, subrogation is the legal process that allows your insurance provider to act on your behalf to recover costs related to an accident from a third party, such as another insurance company.
when does surrogacy occur?
When you file a claim after an accident, your insurance company will work with you to determine who is at fault and what is or is not covered as part of the accident. If the other driver is at fault, her insurance provider can act on her behalf to recover costs from the other party’s insurance company.
Let’s say you’re in a no-fault accident and need to make repairs and cover potential medical bills as soon as possible, but the process is delayed by the other party’s auto insurance. in that case, your auto insurance provider will usually cover those expenses up front to make the process smoother and more efficient.
Subrogation will then occur and your auto insurance provider will seek to recover expenses related to the accident, including the deductible, auto repair costs, and medical expenses, if any.
Through insurance subrogation, you, as the policyholder, can file your claim and move forward faster, while your insurance company does the heavy lifting to recover costs.
does subrogation occur when it is not clear who is at fault?
Auto insurance subrogation occurs when your auto insurance provider seeks payment for expenses already paid from the at-fault driver’s insurance company. So what if it’s not entirely clear who is at fault for the accident? while some accidents may have a clear cause and a “fault” party, not all are.
In this case, what happens next may vary depending on your auto insurance policy and what state you live in. For example, you may pay your deductible and your auto insurance provider may pay the remaining expenses.
It’s also possible that your auto insurance provider could go the subrogation route to recover some costs if it’s not 100 percent at fault. Through subrogation, it is possible to recover the cost of your deductible in addition to the other costs paid by the insurer.
How long does an insurance company have to subrogate?
The subrogation process can vary, but occurs primarily between the two auto insurance providers. Your car insurer supports you in your claim and through subrogation they intend to reimburse you for expenses when fault is determined. It could take months or even longer to determine who is at fault in some cases, so subrogation benefits the policyholder and helps the insurance provider recover funds related to a claim.
If you’re curious how long an insurance company has to subrogate, it depends on the state’s statute of limitations.
according to legal beagle, “when an insurance company or other entity pays a claim for an injured client who is not at fault for their injuries, the insurance company may attempt to recover payments from the party that is at fault for the injury. injury”. incident. the process of recovering the credits paid is called subrogation. each state sets its own statute of limitations, which indicates the period of time after an incident that an insurance company can file a subrogation claim.”
The legal beagle points out that most states have one to six years to file subrogation insurance claims.
what a waiver of surrogacy means (and what you should be aware of)
During the subrogation process, your insurance provider acts on your behalf to recover costs based on your claim from the at-fault driver’s insurance company. your insurance company does the hard part and you don’t have to think too much about it.
but if the at-fault party wants to settle the claim with you directly and without insurance interference, you’ll need to sign a waiver of subrogation.
A waiver of subrogation is the loss of your insurance company’s ability to recover costs. Because the other party wants to settle, a subrogation waiver signs your rights so that the insurance company has no legal right to reimbursement.
Obviously, this is a big deal, so it’s important to talk to your insurance company before making any decisions or proceeding with a subrogation waiver.
the end result
Subrogation insurance claims primarily involve your insurance provider, but it’s good to know what this process is and how it works. it is especially important to note if you are considering signing a waiver of surrogacy. be sure to stay in touch with your insurance provider if you have questions about your claim or are thinking of settling and signing a waiver.
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melanie lockert is a freelance writer, mental health and wealth show podcast host, and estimated debt author. she’s a cat mom to two jazzy cats, miles and thelonious, an avid boxer, a music lover, and she needs coffee to function.