Sometimes an insurance claim can be complicated and cumbersome. There may be elements of the process that are hard to understand. One of those is subrogation, also referred to as “subro.” Unless you’ve had a claim that involved subro, you may not know what it means or what to expect.
Subrogation occurs when an insurance company seeks reimbursement for the costs of a claim from the party responsible for damages. While many people think it happens only after the claim is fully settled, it can occur at any point during the claims process. For instance, in fire claims, a subro rep is often involved from the beginning. That’s why it’s important to share as much information about the claim as early as possible; it helps the insurance company determine if a subro rep is needed.
These scenarios can help you better understand what subrogation is and how it works:
- A truck (driven by the at-fault driver) rear ends another vehicle (driven by you). Normally, the at-fault driver’s insurance company should pay your repair costs and/or medical bills. But let’s say in this instance, the process is delayed so your insurance company pays for repairs to your vehicle and your medical bills. Your insurance company will then seek reimbursement from the at-fault driver’s insurance company for the monies it paid, including your deductible.
- In this scenario, a construction worker trips and is injured due to wires left laying around by an electrician on a construction site. The electrician was negligent in leaving the wires and causing a hazardous condition. The construction worker’s insurance company would use subrogation to seek reimbursement from the electrician’s insurance company for both the other worker’s injuries and for the electrician’s negligence.
- To illustrate this with a homeowner’s claim, let’s say a newly-purchased dehumidifier catches fire and damages the home. Because of the humidifier’s faulty design and defect, subrogation would be used to collect payment for the damages and the homeowner’s deductible from the seller and manufacturer.
If your claim involves subrogation, West Bend will notify you by sending you a letter. The letter will include contact information for your subro rep in case you have any questions during the process. If there’s a recovery at the end of your claim, West Bend will pay back your deductible, if applicable.
The subrogation process helps recover your deductible and out-of-pocket expenses. In addition, it can keep claims that weren’t your fault off your insurance record and help maintain your premium.