The insurance industry uses a myriad of terms and legal jargon that can be confusing to policy holders. However, some of these terms are not as complicated as they sound and can actually provide great benefit to consumers. One of these often misunderstood terms is subrogation, which is a legal process that holds guilty parties responsible and helps to keep insurance costs down.
What is Subrogation?
Subrogation is a process that applies only to liability insurance policies. In essence, it allows your insurance company to sue an individual or a company in order to recoup money that they have paid out as damages.
Example Scenario
If you have a homeowner’s policy that includes liability coverage, it covers any injury or neglect that is directly your fault. Thus, if someone is injured on your property the insurance company pays for medical treatment, legal costs and other fees. If it is later discovered that a third person caused the injury to occur, such as a party at your home, the subrogation process begins. Your insurance company then sues the third party to recover the money that they have already paid out in damages.
For more information about insurance coverage in California, please contact Cook, Disharoon & Greathouse, located in Oakland.
