Subrogation is one of the home insurance terms that most homeowners normally do not worry about because they think that the claims process is relatively uncomplicated. When a tree branch falls through the bathroom window, the homeowner gets the window repaired, submits a copy of the bill to the insurance company, and waits for the check to arrive from the insurance company. Or perhaps someone from the company will come out to inspect the damage and issue a check on the spot. It would seem straightforward, case closed, but not so. Instead, this is when the process of subrogation begins.

Subrogation is the process that the insurance company goes through to recover money paid for damages from the party responsible. In the case of the branch falling through the bathroom window, this could be the homeowner, if the insurance company determines that the reason the branch fell through the window was because the homeowner failed to properly maintain the tree. If the tree was owned by a neighbor, the insurance company may determine the neighbor was at fault for the same reason and act to recover its money from the neighbor or the neighbor's insurance company. A third alternative, of course, might be that the tree was perfectly healthy, well-maintained, but was broken by a gust of wind, pressure from accumulated snow, hail pelting the tree, or any number of similar reasons. Because proving the cause of the damage may not be easy, the subrogation process can be quite lengthy and involved.

Suppose the homeowner's insurance company determines that the neighbor was at fault. Before agreeing to pay, the neighbor's insurance company will insist on proof that payment was made by the homeowner's insurance company, that the homeowner was covered for such damages, that the homeowner was not responsible for the damages, and that the neighbor will not be harmed by the act of recovery. For example, it would not be unheard of for the neighbor to have paid for the damages out-of-pocket to avoid his or her insurance premiums being raised, only to be named as a defendant in a subrogation later. With this in mind, the homeowner's insurance company will insist on complete cooperation in the process of subrogation from the beginning. Failure to cooperate fully could result in only partial recovery. If the homeowner paid a deductible, then it might mean that only part of the deductible will be returned.

So, it's a good idea to become familiar with terms like subrogation and other home insurance terms. It could save you money and prepare you for the possibility of being named as a defendant in a subrogation process as well.

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