Subrogation in Auto Insurance (2024)

A subrogation claim in the auto insurance claims process is an important component of your coverage. Understanding subrogation and how it works can help you get more compensation after an accident.

It’s an essential part of knowing how to file an auto insurance claim. In this article, we’ll discuss the meaning of subrogation and how it works.

Subrogation Claims in the Auto Insurance Claims Process

Subrogation is a legal term that originated from Latin. “Sub” means “instead of,” and “rogare” means “to ask.” Subrogation happens when a third party collects damages or a debt on behalf of someone else. It asks one party to act instead of another.

For example, if you have an accident, and someone else caused it, your auto insurance company can pay your claim and then recover the costs from the other driver’s insurance coverage.

Your company acts on your behalf to pay you promptly and then get compensation from whoever caused the accident. With subrogation, you can often retain a good driver auto insurance discount if an accident was someone else’s fault.

How Subrogation Claims Work

Subrogation in auto insurance usually has several steps:

• Someone with auto insurance has an accident that was another driver’s fault.
• The insurance company of the individual who got hit pays their claim.
• The insurance company pursues reimbursement from the at-fault driver’s insurance company.
• If necessary, that insurance company sues the other driver to recover the cost of the claim.

When subrogation happens, you transfer your right to sue to another party. In this case, the other party is your insurance company.

If your company decides it doesn’t want to use subrogation, you can speak to a lawyer and file your own lawsuit against the person who caused the accident. Mediation can help you negotiate with the other driver and their insurance company.

Waiver of Subrogation

In some circumstances, you might want to keep your auto insurance company from suing someone on your behalf. A waiver of subrogation is an agreement that keeps your insurance company from suing the party who’s at fault for reimbursement.

Some insurance companies don’t let people waive subrogation. Before you sign a waiver of subrogation or any other agreement, check your insurance policy or speak to the customer service department to make sure that your insurer permits this.

You may need to sign a waiver of subrogation if an at-fault party asks you to sign a waiver of subrogation in exchange for a direct settlement.

You might also know the at-fault party and want to avoid risking your relationship with them by letting your insurer sue them. A waiver of subrogation could also be part of a contract that people sign before having any accidents.

Understanding Subrogation Claims and Their Benefits

Subrogation can help you get paid for repairs or a replacement vehicle more quickly after an accident. Insurance companies are often more likely to make payments when they have the option to sue a third party or negotiate with them to recover funds.

Since the at-fault driver or their insurance company ultimately pays the financial penalty for the accident, your auto insurer usually won’t raise your rates for a claim that involves subrogation.

You can compare subrogation policies and other insurance options by getting affordable instant auto insurance quotes. You can also learn how to check the status of an auto insurance claim.