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In a car accident, the responsible party’s insurance company pays for any claims filed by the victims. This third-party carrier pays for the repair of the damaged vehicle along with the medical bills of anyone injured in the accident. However, this process takes time and the insurer may fight the claim. Where does this leave those who sustained injuries through no fault of their own? Will they become responsible for any medical bills and the cost of repairing their vehicle? 

In this situation, the insurer of the victim often pays these bills. They then pursue a claim against the insurer of the responsible party. This process, known as subrogation, allows them to collect any funds they paid out to the victim, including the deductible, medical payments, and more. With a successful subrogation, the insurer receives a refund on any monies paid out relating to the claim. The victim may also receive a refund if they paid for any expenses related to the accident. Every driver needs to know how insurance subrogation works to ensure they remain protected following an accident. 

Who Benefits From Subrogation?

People want to know why they should worry about subrogation. Isn’t this a matter for insurance companies? The subrogation process helps keep premiums low for drivers with a good driving history. Furthermore, it makes it possible for insurance companies to pay claims in a timely manner. They know they have a means of seeking reimbursement. 

When is This Process Used? 

A person may wonder when the subrogation process needs to be used. Often, there is a dispute regarding who is at fault for the accident. As the parties wait for a resolution to the matter, they watch bills relating to the accident accumulate. To prevent this from happening, a driver may choose to file a claim with their personal insurer and pay the deductible. The insurer pays the bills related to the claim and pursues compensation from the responsible party. 

What Not to Do?

An at-fault driver may ask a person filing a claim to sign a waiver of subrogation. Never do so without consulting your insurance company. This agreement states the person filing the claim agrees to not seek compensation from the at-fault party. Many insurance companies prohibit their clients from signing a waiver of this type. Other companies require notification before the client signs this document. Make certain you know the requirements of your insurance company before taking this step. 

How Does the Subrogation Process Work? 

Insurance companies typically handle the subrogation process. However, drivers should know how it works and what to expect as the process moves forward. This differs based on who is at fault in the accident. 

When a driver is the victim of an accident, their insurance company handles any subrogation claims. The driver has very little involvement in this process. The insurer notifies the client when they pursue the claim. If the insurer doesn’t send this notification, the victim retains the legal right to sue the responsible party for any costs related to the accident they paid out of pocket. This includes any deductible they were required to pay. 

If a driver bears responsibility for an accident, the insurer handles the entire process if victims or their insurers decide to file a subrogation claim. However, when the responsible party doesn’t have insurance, the victim or the victim’s insurance company may sue them directly. 

Hopefully, a person never finds they need to use the subrogation process. However, if doing so becomes necessary, work with your insurance company or a lawyer to ensure you receive fair treatment throughout the process. Always report an accident and speak to your lawyer or attorney to protect your rights as the case moves forward.