What Happens If I Ignore a Request for Subrogation for Homeowner Property Damage From My Insurance Company

Insurance companies occasionally have to compensate their clients for losses brought on by third parties. The insurance provider will then try to subrogate—or recover—the money it spent on the claim from the party that caused the harm. Because the subrogation process may impact the recipient's legal rights, subrogation letters should be carefully scrutinized.

Initially Speaking

There are several ways for an insurer to demand payment from the accountable party. Sometimes, it takes a quick phone call to the at-fault party's insurance company to make things right. However, the subrogation carrier must deal with the accountable party if she is not covered by insurance. The insurance may obtain a background report known as a skip trace if it is difficult to find the irresponsible party.

Letters of Subrogation

Subrogation adjusters send letters to people who seem to be in charge of paying the insurance company back. Letters typically ask the receiver to contact the insurance company and include the claim's date, the amount paid by the insurer, a list of the losses, and the date of the claim. Although the letter itself has no bearing on the recipient's legal rights, it does offer an opportunity to try and resolve the conflict out of court. If the recipient disregards the letter, the insurer may decide to sue the accountable party or keep mailing demands for compensation.

Lawsuits

Some law firms focus on bringing subrogation claims on behalf of insurance providers. They bring numerous cases despite being aware that many defendants lack insurance and legal representation. In many of these actions, the plaintiff is awarded a default judgment. A defendant can prevent a default decision by submitting a formal written response, known as an answer, to the court. Without a lawyer, the defendant will be at a disadvantage and could not be familiar with the court's rules. Defendants who want to contest a subrogation claim choose to work with legal counsel.

Alternative Defenses

A defendant may challenge the case in court if she feels she is not to blame for the harm by presenting proof in the form of photos and witnesses. Additionally, the defendant can claim that the statute of limitations has run out if the insurer delayed too long in filing the complaint. The defendant may consent to make regular payments in exchange for the action being dropped if the complaint was timely filed and the defendant acknowledges owing the damages.