What happens after your insurance company pays for a loss that's not your fault?
Using your own auto insurance for a claim that's not your fault can leave you feeling a bit frustrated, but sometimes that's your best option to resolve a claim quicker so you can return to your normal life. If you've been in this situation, then you've probably heard of subrogation.
Believe it or not, your claim doesn't end once repairs are complete and the bills are paid. If you had to use your insurance for a claim for which you weren't at fault, you and your insurance company are still entitled to receive the money paid on the claim. The process to recover that money is called subrogation.
When Does Subrogation Occur?
When your insurance company covers a loss that's not your fault, they may pursue the at-fault party, which often is the other insurance company, to recover payments made for your damages and injuries. Insurance companies can only subrogate other parties if their customer is not at fault for an accident.
For instance, let's say Joe rear-ends your car but his insurance company is taking too long to get back to you. Your car isn't drivable, and you don't want to keep asking friends to chauffeur you around town, so you decide to use your own insurance (from Progressive, coincidentally) to repair your car. You pay your $500 Collision deductible, fix your car, and are back to normal in a couple of weeks.
However, you still paid $500 out of pocket and your insurance company paid thousands of dollars for an accident that wasn't your fault. In situations like this, your insurance company will subrogate Joe's insurance company to recover the money paid for the accident – and that includes attempting to recover your $500 deductible for you.
What Happens During Subrogation?
At Progressive, your claims adjuster will send your file to our subrogation department (often called "subro") once his portion of the claim is closed.
When subro receives your claim, they continue the attempts to contact the at-fault party or insurance company to resolve the claim. This may be a simple matter of calling the other party's claims adjuster and determining when payment will be made, or it may involve repeated attempts to contact the at-fault individual if that person didn't have insurance at the time of the accident.
Subrogation representatives will work closely with the other parties to negotiate payment of the claim. In some cases, subrogation claims may go to court if Progressive thinks — and you agree — a lawsuit is the best option to take to recover payment.
A successful subrogation claim means our reps were able to negotiate a settlement and receive payment for the claim. At this point, we'll be able to give you back your deductible, too.
Why Subrogation Is Important
Subrogation is a very important last step in our claims resolution process — and an important aspect of our business. The successful recovery of money we've paid on claims allows us to pass the savings to you, in turn helping to keep your insurance rates down.