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.
  
  Behind The Scenes
  Your auto insurer contacts the other involved parties or their insurance companies and starts its investigation.

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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.
  
  Behind The Scenes
  Subrogation representatives at each insurance company review the details of the accident to determine who is at-fault. Any given party can be wholly or partially liable.

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• Step 4 - First-Party Payment

• You pay your deductible to the repair shop. If the damage is covered, your insurer pays above your deductible, up to the actual cash value of your vehicle.
  
  Behind The Scenes
  If either company disputes their driver’s liability, the claim may go into arbitration. A neutral mediator will make a determination that the insurers have to follow.

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• Step 5 - 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. You may be asked to cooperate with trial appearances or depositions.
  
  Behind The Scenes
  The insurance company of the at-fault party reimburses the other involved insurer(s) for paid deductibles and claims payments, up to their insured’s liability coverage limit.

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• Step 6 - 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, you may also 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.
  
  Behind The Scenes
  The subrogation representative authorizes a check for the recovered amount of your deductible to be refunded to you.

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The subrogation and arbitration processes can take much longer than it takes to repair or replace your vehicle. It could be three to six months before you are reimbursed for your deductible — or longer for claims that are litigated. Recovery is not guaranteed.

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. 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.