10 Important Considerations Regarding Subrogation
Settling subrogation demands from third-party carriers effectively is critically important for insurers. Often, what carriers request isn’t what an insurance company truly owes.
While no one would say third-party carriers inflate claims, it’s in their best interest to determine the high-end expense and use that as the basis of their subrogation demand. And if your company doesn’t conduct a thorough review of the request (or simply pays it with little or no evaluation), you may be agreeing to an expense that could conceivably be much lower.
Of course, carefully reviewing and settling subrogation demands takes time and effort. This requirement adds to the workload of already-busy staff adjusters. Fortunately, you can have outside insurance experts handle subrogation demands for you. That way, adjusters can stay focused on other work.
But whether you leverage our ProCheck Subrogation service or handle subrogation on your own, there are 10 key considerations you should keep in mind.
1. Detailed subrogation reviews should be conducted on every demand.
Some insurers look more closely at demands that seem excessive or non-standard in some way. However, even seemingly typical third-party carrier requests can include sums you shouldn’t reimburse. Consequently, an experienced subrogation expert or team should carefully review every subrogation demand.
2. Cooperation is essential.
While handling subrogation demands may require some back and forth between the parties, it’s crucial that the interaction remains cordial and professional. Nobody “wins” when negotiations break down, and arbitration is required.
3. You should maintain detailed supporting documentation.
It’s vital that you gather detailed information about an incident and maintain all of it in an organized way. Teams assessing subrogation demands will need the details, and making it easy to access the information streamlines the process.
4. All parties should avoid the spoliation of evidence.
Problems arise when someone with an obligation to preserve evidence intentionally or unintentionally fails to do so. Everyone should do their part to ensure that stakeholders can get a clear and complete picture of the incident so that it can be settled fairly and efficiently.
5. You must be aware of statutes of limitations.
Each state sets statutes of limitations for claims recovery. It’s important to understand those that affect your operations.
6. You must understand your rights as the insurer.
Insurers have the same rights as insured against third parties, even if those rights are contractual in nature rather than based on tort law.
7. An outsourced subrogation team is an extension of your team.
Some insurers hesitate to have an outside subrogation team act on their behalf because they want to maintain control of these interactions. It’s important to understand that outsourcing subrogation doesn’t adversely affect your visibility into demands or outcomes.
A subrogation team like ours works as an extension of your team. While we may be physically separated from your location by dozens, hundreds, or even thousands of miles, we stay in close contact with you so that you can get case updates and other information whenever you want or need them. And when our work on a claim is complete, we provide a detailed subrogation demand summary you can use in settlement and arbitration scenarios if required.
8. An outsourced subrogation team uses your subrogation guidelines.
Engaging with an outsourced subrogation team is a “best of both worlds” situation. The group uses its skills and expertise while working within your company’s subrogation guidelines.
9. You can rely on a subrogation service provider for all aspects of the process.
A team like ours handles subrogation demands the same way an internal team does. For example, we ensure the completeness and integrity of supporting documentation, including damage appraisal, photographs, towing bills, rental bills, storage bills, other invoices, supplemental appraisals, etc. If documentation is missing, we contact third-party carriers to obtain it.
We also review the use of aftermarket or recycled parts for repairs. If these types of components are appropriate but weren’t used, we make appropriate adjustments once we confirm parts were available on the actual repair date using our historical database services.
10. Subrogation costs avoided go to your bottom line.
Effectively addressing subrogation demands and reaching a fair (ideally lower) settlement is tedious. However, it’s essential to keep your eyes on the goal: protecting revenue that goes immediately to your bottom line.
Outsourcing Subrogation Services: A Cost-Effective Way To Handle Crucial Work
The savings achieved by an outsourced subrogation team pay for the work performed almost immediately. And that’s just the financial impact.
There’s no way to measure the value of relieving internal staff from this time-consuming, resource-intensive, sometimes-stressful work and allowing them to focus on other challenges. However, the insurers we work with would say that form of “savings” is significant.
Once our team has integrated with yours, work is completed and shared in a streamlined, frictionless flow that saves you money while making everyone’s job easier. Contact Comsearch today to get started!