After a major payout, your insurance company is certainly counting on recovering as much as possible from the responsible party through subrogation. When deciding to subrogate, you have a number of options, and you will certainly want to choose the option that provides the best opportunity for maximum return.
It may be tempting to set the wheels in motion and let the legal process play out, for example, by sitting back and letting the attorney for the injured party handle the lawsuit. However, you may find that your active involvement in the process and open communication with all involved will often produce the most satisfactory results.
Seeing the whole picture
Subrogation is a term few insurance policy holders understand. In essence, you pay out an insurance claim -- for example, to a car accident victim --, then you attempt to recover that payout from the person deemed liable for the accident. Subrogation keeps your company viable. However, often the process of subrogating, with its time consumption, fees and potential litigation, may eat into the bottom line.
To get the most from your subrogation efforts, advocates recommend the following:
- Stay in close contact with all parties: It is not likely you will recover 100 percent of your loss, but communicating effectively with all sides may allow you to reach more common ground, potentially resulting in a larger return.
- Notify all parties of your intention to place a lien: When the court and the plaintiff know you plan to take your claim (minus the client's legal fees) from any court-awarded recovery, you can allow the lawsuit to proceed.
- Know when it is time to intervene: Sometimes the defendant will deny liability, or the plaintiff's injuries may raise the defendant's level of fear, causing the case to stagnate unless you regain control.
Of course, if the case is bogged down in prolonged discovery and other stalling tactics, you may find that intervening is a better plan than filing a lien and hoping for the best.
On the other hand, you may feel it is too complex a matter to take chances without the advice of a legal professional. In fact, other options may be available that are more appropriate for your circumstances, and an attorney can advise you on these alternatives. Someone skilled in every step of seeking subrogation on behalf of insurance companies can provide the best advantage for a more positive outcome.