Subrogation Agreement

What is a Subrogation Agreement?

A personal injury subrogation agreement is a legal arrangement in which an insurance company, after paying a claim for a personal injury, acquires the rights to pursue a lawsuit against the party at fault.

This is typically done to recover the costs of the claim it paid to the insured person. This agreement is usually outlined in the terms and conditions of an insurance policy, which the insured agrees to when they purchase the policy.

What are the benefits of creating a Subrogation Agreement?

1. Immediate Coverage: Subrogation allows an injured party to receive immediate coverage for their medical expenses and other damages without having to wait for a court judgment or settlement from the party at fault. This can significantly lessen the financial burden and stress associated with injury-related costs.
2. Legal Representation: In some instances, the insurance company may assume the responsibility of legal proceedings to recoup the costs from the at-fault party. This relieves the injured party of the stress and time involved in pursuing legal actions themselves.
3. Prevent Double Recovery: Subrogation agreements help prevent the insured from receiving a double recovery – once from their insurance company and once from the at-fault party. This system helps keep insurance premiums in check for everyone by preventing overpayment for claims.
4. Policyholder Protection: Subrogation ensures that the financial burden of the claim falls on the party responsible for the injury, not on the innocent policyholder or the insurance pool as a whole.