What is Subrogation?
<lingo>Subrogation is a way for an insurance company to claim money they're owed and to control how much money is paid out in the event of an injury claim. So let's say a guest of yours trips on a wheeled toy that was left in the middle of the staircase and then breaks their leg. Most people have some type of medical insurance that will cover the initial cost of their injuries as a part of their overall policy. However, once the claims have been received and settled by the health insurance company, the health insurance company will begin doing their own investigation into the matter. Once they find out that the injuries resulted from a negligent homeowner, they'll request the bills be paid for by the injured party.</lingo>
Subrogation refers to how insurance claims are processed in the event of an injury. In the case of home insurance, these injuries usually stem from neglect on the part of the property owner (e.g., a slippery floor or poorly maintained lawn). Claims may be paid for either by the owner's property insurance or from their out-of-pocket (depending on coverage level).
Subrogation also effectively limits how much money the injured party can collect and from whom. If an injured party receives money from one source to cover their medical expenses, they cannot then claim money from another source. Subrogation helps eliminate exploitation of insurance companies and homeowners alike.
<twitter>Subrogation is a way for an insurance company to claim money they're owed and to control how much money is paid out in the event of an injury claim.</twitter>
So if the injured party's medical insurance covers the cost of their injuries, the injured party cannot then claim any additional funds. In other words, the injured can't receive money from both their health insurance company and the homeowner. This form of insurance is an important one to know in the case of a complicated medical claim as some parties will attempt to dip into as many pockets as possible.
These laws apply to typical medical insurance as well as government-sponsored programs such as Medicare. While the exact terms of subrogation vary by state, they're a strong reminder to homeowners to purchase the insurance coverage they need to cover injury claims.
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