Guide to Auto Subrogation Claims

Here is everything you need to know about subrogation claims, a type of third-party claim.

How Long the Process Takes

The length of time it takes to complete a subrogation claim depends on the details of the related incident. For example, a claim with partial fault or an uninsured driver takes longer to process than one where both parties are insured and one party is completely responsible for the accident. Straightforward subrogation cases typically resolve within 30 to 90 days, while complex cases involving disputed liability can take six months or longer.

If you are not responsible for an accident and the third-party claim with the other party’s insurance is delayed, your own insurance company may help you pay for repairs in the meantime, which means you’ll have to pay your deductible. If and when your insurance company successfully recoups the costs from the at-fault party’s insurance, some or all of your deductible will be refunded to you.

Partial Fault

If both parties share fault, you will have to take a look at your state’s negligence laws to see how much you can recover. See the table for your state’s negligence laws, which we’ll explain more in detail below.

Understanding negligence law types:

• Contributory negligence: In Alabama, the District of Columbia, Maryland, North Carolina, and Virginia, if you are found even 1% at fault for an accident, you cannot recover any damages from the other party. This is the strictest form of negligence law.
• Pure comparative negligence: In states like California, New York, and Louisiana, you can recover damages even if you are 99% at fault. Your recovery is simply reduced by your percentage of fault. For example, if you are 30% at fault in a $10,000 accident, you can still recover $7,000.
• Modified comparative negligence: Most states follow this approach, which has a threshold (typically 50% or 51%). If your fault exceeds this threshold, you cannot recover damages. Below the threshold, your recovery is reduced by your percentage of fault. In March 2023, Florida changed from pure comparative negligence to modified comparative negligence, barring recovery if you are more than 50% at fault.¹

Uninsured Drivers

If you get into an accident with an uninsured driver, the subrogation process will take longer, as your insurance provider has to sue that driver directly rather than deal with their insurance provider. Given that an estimated 15 percent of drivers are uninsured across the U.S. as of 2023,² it’s a good idea to have uninsured motorist coverage so you don’t have to wait for your insurance company to subrogate claims.

What happens during subrogation

The subrogation process typically follows these steps:

1. Initial claim payment: Your insurance company pays for your damages or injuries under your policy coverage, such as collision or comprehensive insurance.
2. Investigation: Your insurer investigates the accident to determine fault and gather evidence supporting their subrogation claim against the at-fault party.
3. Demand letter: Your insurance company sends a demand letter to the at-fault party’s insurer, requesting reimbursement for the amount paid on your claim.
4. Negotiation: The two insurance companies negotiate the settlement amount. This can involve back-and-forth discussions about liability and damages.
5. Resolution: Once settled, your insurer recovers the funds and typically refunds your deductible if they successfully recoup the full amount from the at-fault party’s insurance.

What Is an Auto Subrogation?

Auto subrogation is a way that your auto insurance provider can prevent you from paying for an accident that wasn’t your fault by retrieving money from the at-fault party’s insurance company.

How Subrogation Works

Subrogation occurs when you are not at fault in an accident but had to pay for a deductible, car repairs, or medical costs. Your insurance provider will subrogate a claim with the at-fault party so you can get reimbursed for your costs. If it’s successful, you’ll receive a partial or full reimbursement.

Subrogation claims are part of the auto insurance process, but they’re not something that you as the policyholder will have to deal with directly. They are handled behind the scenes between insurance companies when one company attempts to recover money from the at-fault party’s insurance. However, if you’re at fault in an accident and your company pays out a subrogation claim to another insurer, your premiums may increase.