Subrogation

Back to: TelaClaims Adjuster I – Insurance Basics for Adjusting a Claim

Subrogation is defined as the transfer of rights that allows the insurer to recover its losses after it has indemnified a policyholder. It is also important to understand that Subrogation only applies up to the amount that the insurer pays, and the policyholder still has the right to demand payment from the guilty party for any damages that exceed the indemnity. So let’s say an insured suffers a $30,000 loss but is only paid $20,000 from the insurer, the insured is well within their subrogation rights to demand the other $10,000 from the guilty party. How Does the Process work: Subrogation is generally the last part of the insurance claims process. In most cases, the insured hears little about it because it is something that happens between insurance companies. If an insurance company does decide to pursue subrogation, the law requires that they inform the insured that they are doing so. This is important for two reasons:

• If the insurance company decides to pursue subrogation to recover costs, they must try to recover the cost of the insureds deductible as part of the process and refund it to the insured if they do recover the deductible.
• Also, the insurance policy will require the insured to cooperate with any attempts by the insurer to pursue subrogation.