Your car insurance policy is filled with jargon that you might not understand. One term found in auto insurance policies that many drivers are not familiar with is subrogation. The subrogation process typically occurs behind the scenes after an accident.
Subrogation is the process by which the not-at-fault driver's insurance company seeks compensation from the at-fault driver's insurance company after paying out a claim. While you aren't directly involved in the subrogation process, it can directly benefit you in a number of ways.
1. Lower Monthly Premium
The subrogation process is designed to help insurance companies recover some of the expenses they incur when paying out a policyholder's claim. The recovery of these expenses is critical to the insurance company's bottom line.
Successful subrogation allows your insurance company to become more financially stable. The result of this stability can be lower monthly premiums for policyholders.
2. Eliminate Legal Problems
Car accidents can easily become major legal battles. One of the benefits of the subrogation process is that it relieves you of the burden of dealing with the legal aspects of a car accident.
Instead of spending time meeting with attorneys, filing legal claims, and attending court hearings, you allow your insurance company to handle the claim. The subrogation process can eliminate a lot of stress after your car accident.
3. Reduce Repair Time
Many drivers rely on their car daily to travel to and from work. The subrogation process allows you to get back on the road faster after a car accident. Your insurance company will immediately pay for any repairs that your car needs so that you can safely operate the vehicle again.
Without the ability to recoup these expenses via subrogation, your insurance company would have to wait until the at-fault driver's provider made a payment before covering the cost of your vehicle repairs.
4. Recover Your Deductible
Insurance policies typically specify an amount that drivers must pay before their insurance coverage kicks in. This deductible can range in value based on the parameters of your individual policy.
The subrogation process can help you offset the cost of your deductible. Successful subrogation can result in your insurance provider refunding a portion of your deductible after your accident.
Although you may not actively participate in the subrogation process, you can feel the effects of this process when utilizing your auto insurance policy in the future. Make sure you understand the subrogation approach used by your insurance company so that you can benefit from the process. Contact an insurance agency like Illinois Insurance Center Inc to learn more.