Subrogation

Subrogation is when your insurance company has paid a claim for damages and it was determined by your insurance company that the other party was at fault for the accident. They will try to collect back what was paid out on your claim from the responsible insurance company.

It is not the insurance company’s responsibility to collect back your deductible however, it will be included in their subrogation demand. If the recovery of your deductible is successful it will be reimbursed back to you. Your insurance company will send you a subrogation acknowledgement letter .

If the other party’s insurance company has determined liability to be adverse to you they will reject the subrogation demand and will send their own demand to your insurance company. Your insurance company would deny the demand however, you would not recover your deductible.

If both insurance companies disagree to who was at fault and both are a member of of Inter-Company Arbitration, they will submit the claim for an arbitration hearing. This is when each insurance company sends the supporting documentation on the facts of the accident, as stated by each party to be reviewed by the arbitration board and a final decision is made on who will pay for the damages. The board is made of of claims professionals within the insurance industry.

The subrogation personnel are usually paid a percentage of what is collected so their efforts are usually aggressive.

If the responsible party did not have any insurance coverage all subrogation efforts would be directed to the responsible individual.

If you only had liability coverage and it was determined that you were not at fault for the accident, your insurance company may or may not assist you in filing a claim with the responsible insurance company. This is partly due to the fact that there would be no subrogation to collect as nothing was paid out and therefore, no exposure to your insurance company. If they do assist you it would be as a courtesy. This is not their responsibility.