The Importance Of Understanding A Waiver Of Subrogation
Don’t Be Denied, Understand Insurance Subrogation
Insurance subrogation and waiver of subrogation are insurance terms that you may or may not be familiar with. If you own a home or car and carry insurance on them you may want to learn more. Insurance policyholders who do not understand a subrogation claim or what a waiver of subrogation is could be denied insurance coverage.
Basic Subrogation
Subrogation occurs when your insurance company pays your insurance claim even though the damage was caused by a third-party. For example, you get rear-ended, the insurance company determines the person (the third-party) that hit you is at fault. Your insurance company pays to repair your auto then goes after the person who hit you to recover that money.
When the insurance company does recover money from the third-party, they keep that money. If you paid your deductible the only money you receive back is that deductible.
A waiver of subrogation means that you sign away your rights for the insurance company to go after the third party in the event of a loss. If you do that, the insurance company will be unable to recover their money and your deductible.
Subrogation Claim
Insurance policies can seem wordy and complicated making them hard to read and understand. Even if you do not completely understand your insurance policy just know that insurance policies almost always state that you, the insured, cannot take any actions that would limit the insurance company’s right to subrogate (or go after the third-party to recover money paid out). If you do interfere, your insurance claim could be denied and you will be paying for damages to your property out of your own pocket.
If you need additional information about subrogation claims you should contact your insurance agent. They should be able to discuss in greater detail how your insurance policy works with subrogation claims.