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Using subrogation law to recover revenue


While most parts of law tend to be complex in nature, subrogation law can tend to be even one of the more complicated sections of the law.

So what is subrogation law exactly?

Subrogation means to “substitute in one thing for another thing.” This means that one thing can be swapped out for another item essentially. Subrogation law is intended to avoid injustice and it is used as a device to achieve equality. Subrogation law can also be used to help recover revenue for your business.

When is subrogation law used?

Most often subrogation law is used when you are involved in an accident and your insurance policy has to be used. Your insurance policy is intended to compensate you monetarily when you are involved in an accident where you are not at fault for causing the accident. As a part of subrogation law, your insurance company will pay you for the damage that occurred to you and then the insurance policy will seek compensation from the party that caused the accident.

In this way, you have been “made whole” by your insurance company, but then your insurance company is “substituting” their loss by seeking out damages from the party at fault.

However, this whole situation changes drastically if, for some reason, your insurance company will not cover your accident and you are required to pay for the damages out of pocket. Then you will need to utilize subrogation law to retrieve compensation directly from the party who was at fault for your damages.

Subrogation law for your business

Though subrogation law is often used for private citizens it can also help your business to recover lost revenue. A study has found that 15 percent of claims close without consideration of subrogation. By exploring these claims your business could stand to recover a significant amount of revenue. Some areas where your business could benefit from subrogation include:

  • Large Loss Property Subrogation
  • Fire and Explosion Subrogation
  • Workers’ Compensation
  • Auto Subrogation

Subrogation law and settlement payments

It is important to know that each state is different on when and how exactly they will allow and insurer to file their subrogation interests. It is also good to know that the existence a subrogation interest can affect the settlement of third party lawsuits.

Some issues can arise that are associated with subrogation law and these can begin to cause some difficulties where a settlement of a lawsuit is reached against a third party. You, as the injured party, and your insurance company, may receive compensation from your claim with the third-party member who was at fault for causing the accident. However, a settlement of this nature could also affect your right to receive continuous benefits from your insurance company and it could compromise your insurance company’s right to have to keep paying them. The good news is that your insurance company would have to notify you about their obligation to continue paying these benefits and they would have to notify you of these before the settlement is totally completed.

As stated previously, subrogation law is a complex part of the law that includes many different facets and nauseous. It certainly is not something you should try to navigate by yourself or without an experienced subrogation lawyer. Choosing the wrong attorney or failing to understand subrogation law (and where you could make appropriate claims) could end up costing you money and possibly a case. If you need help with a subrogation case in your state, contact an experienced and well-known subrogation law firm today.

About Janine Lucas'

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