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Hurricane Harvey and Commercial Insurance Claims: What is “Subrogation?”

Call The Doan Law Firm today to find out how an experienced insurance lawyer can protect your rights

Hurricane Harvey has caused, literally, billions of dollars in damages to the Texas gulf coast. In many cases, at least a portion of these losses will be covered by some form of property damage insurance. This also means that insurance companies will explore every avenue available to reduce their own losses due to settlements that they must pay to their policyholders. One such avenue is “insurance claim subrogation,” a process that will probably be unfamiliar to anyone outside the legal and insurance professions.

In today’s post, the Commercial Property Insurance lawyer at the Doan Law Firm will give a brief explanation of the subrogation process and how subrogation claims can affect the relationship between a property owner and his or her insurance carrier.

What is a “subrogation claim?”

“Subrogation” is the legal principle allowing one party to take over the rights or remedies of another party against a third party. This is usually stated as “subrogation allows one party to ‘step into the shoes’ of another party.”

Subrogation cases arise after an insurance company pays a claim submitted by its injured policyholder. Then, to recover at least some of its losses, the insurer will often sue the “at fault” party (the party that caused the loss) to recover the amount that it was compelled to initially pay. The majority of subrogation claims are the result of motor vehicle accidents. However, there is usually nothing that would prevent commercial property insurers from using subrogation to recover at last a part of their tremendous losses resulting from Hurricane Harvey.

In order to file a subrogation claim against a third party, your insurer needs your permission to do so. This is usually done via a “subrogation clause” that is included in practically all types of private and commercial property. Additionally, some government disaster benefit programs may legally require subrogation on your part if you are to participate in those programs.

A tactic that is sometimes employed by insurance carriers is called the “no subrogation clause” or “no subrogation agreement. In this tactic, an insurer will insert a clause in a settlement agreement that specifically forbids further legal actions after a claim is settled. The logic behind such clauses is as follows:

1. You suffer an injury and the responsible party’s insurer, and possibly your own carrier, pays your claim.

2. As part of the settlement agreement, you agree that you will not file any additional claims against the responsible party’s insurer.

3. Since subrogation involves having your insurer “stand in your place” to sue for any losses it may have suffered, a “no subrogation” clause prevents your insurer from suing anyone else to recoup its losses.

Why you may need a commercial insurance claims lawyer in subrogation claims

As an unknown attorney once stated, “Whenever you hear the word ‘subrogation,’ start looking for a lawyer.”

From the very basic information presented here, it should be obvious that commercial insurance claims and subrogation actions can present a very complex legal situation. As in any matters involving insurance law, it is vital that you consult a lawyer with experience in these issues in order to protect your best interests when dealing with insurance carriers and their employees.

In most cases, subrogation will be a matter between your commercial property insurance carrier and whomever it feels was responsible for it having to honor your claim. Thus, the only time that you may become a party in such an action is if an insurance carrier asserts that you were at least partially to blame for damages that occurred to someone else’s property and such damage was the result of negligence by you. Such negligence can be difficult to prove, but defending yourself against such a claim may require the services of an experienced Commercial Insurance Claims lawyer.

If you are involved in a subrogation action, you are strongly advised to retain legal counsel with experience in all aspects of insurance law.

The Doan Law Firm 1 Riverway Suite 2325 Houston, Texas 77056 (832) 835-0000

Contact an Experienced Personal Injury Lawyer

After an accident, the responsible party's insurance company may try to reduce the claim amount. Commonly, insurance adjusters are trained to get information from the injured to assist in reducing the claim. Though some insurers are less guilty of this practice than others, it is important to realize that insurance companies are profit-oriented corporations and reducing claims results in increased profits for shareholders. This can create a situation for the injured in which they are offered a settlement that does not truly reflect the damages suffered. If you accept this settlement, you lose the ability to get more money should your injuries require further medical treatments. It is critical that victims get legal assistance in any personal injury case, and The Doan Law Firm is prepared to fight relentlessly for your rights.

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