What Is Subrogation in Auto Insurance?

Determining liability takes time — more time than you’d want to wait for the payment to repair your car. Subrogation gives you the convenience of not having to file a claim with another driver’s carrier, while your insurer pays your covered repair costs.

How does subrogation work?

If you have collision coverage and get into a car accident, notify your insurance company immediately. They will start their investigation, and, if they suspect the other driver is at-fault for the accident, they will initiate the subrogation process.

Your Claims Experience Journey

• Step 1 - Report

• You report a claim for an auto accident.

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• Step 2 - Review

• Your auto insurer reviews your policy to determine if you have coverage. For example, collision coverage responds to damage from a crash with another vehicle.

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• Step 3 - Investigation

• Your auto insurer assigns an adjuster, who reaches out to schedule an appraisal, repairs, and a rental car, if needed. To help move the process along smoothly, you must provide your detailed statement, photos, and videos of the loss to the adjuster.

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• Step 4 - Payment

• If the damage is covered and your vehicle is repairable, your insurer pays above your deductible.

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• Step 5 - Reimbursement of Deductible (If Recovered)

• If the other involved party is liable for the accident, your insurer may reimburse some or all of your deductible. If you have out-of-pocket expenses that are not covered in your policy, you will need to submit them directly to the insurance company of the at-fault driver. The amount or percentage of any recovery may be affected by the amount of insurance coverage or assets that are held by the at-fault party; the value of any other parties’ claims; and the allocation of fault between the parties.

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• Step 6 - Third-Party Payment

• Your adjuster follows up with the rental company, towing agency, or repair shop (as needed) until your car is back in use or you reach your coverage limit.

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The subrogation and arbitration processes can take much longer than it takes to repair or replace your vehicle. Subrogation begins when all payments are made for the claim. The process can take a minimum of six months to recover your deductible and you may be asked to participate in further resolution of your claim. Recovery is not guaranteed.

What Happens if I ignore a Subrogation Letter?

Never ignore correspondence from your insurance company. Also, if you receive a letter from another insurance company, then send the letter to your insurance company for guidance. If another party or insurance carrier asserts that you are at fault and responsible for a claim, they may not wait to file a lawsuit if you ignore their requests.

What if you don’t have collision coverage?

If you don’t have collision coverage, your insurance company will not pay for your car repairs. However, you may contact the other driver’s insurance company and file a claim through them.

What if the responsible driver doesn’t have enough liability coverage?

The subrogation process can only recover up to the other driver’s liability limit. If the other driver has insufficient coverage, your claim will go through a different process for uninsured/underinsured motorists (UM/UIM).

UM/UIM coverage is the part of your insurance policy that responds if the at-fault driver does not have the liability limits to pay your damages. In general, UM/UIM coverage helps to close the gap between what the other driver’s insurer will pay and your actual damages or bodily injury damages. In some states, UM/UIM payments are restricted to your medical bills. Other states allow UM/UIM coverage to cover the physical damage to your vehicle.