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In the event of a loss, insurance providers have the right of subrogation. What this means is the insurance company can choose to recover the claim amount that was paid to a covered person, if the loss was caused by a third party. After expenses are paid, the amount recovered has to be divided evenly with the insured person so that all deductibles the insured was responsible for are covered.

In more detail, if you are in an accident that wasn’t your fault, then your insurance provider can pay your claim, only if you first agree to give your rights to sue the party that’s at fault. Subrogation is defined as the process of signing over your rights to sue, to your insurance provider. This enables your insurance provider to pay your claim and pursue reimbursement from the party at fault.

In auto insurance, subrogation is very common.  To give you a better picture, imagine you were hit by an uninsured driver. If you have collision coverage or uninsured motorist protection on your policy, then you could file the claim within with your own insurance provider, therefore avoiding the headache of suing the uninsured driver for the damages. When it gets to this point though, you are the only person able to sue the uninsured driver, because you were the one that experienced the damages. Since it was you they hit and not your insurance provider, your insurance provider doesn’t reserve the right to sue them for the accident.

In a situation like this, you’d have to sign over your right to sue to your insurance provider. The signed statement now gives your insurance provider the right to sue the uninsured motorist that hit you, and collect damages for it. Going about the situation this way will allow you to receive payment from your insurance provider and will allow them to get back the amount of money paid to you for the claim from the driver at fault, at a later time.  Therefore, it works in you and your insurance provider’s favor.

Contact us for more information on the right of subrogation, or to get a quote on McAllen auto insurance.

Posted 8:18 AM  View Comments

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Raymond Longoria Insurance
2025 N Conway Ave
Mission, TX 78572
Phone: (956) 581-1034
Toll-Free: (888) 296-0345