There are many facets to an insurance claim.  One of these is called subrogation.  Subrogation means, in a sense, that one party has the right to "step into the shoes" of another party for the purpose of bringing a claim for damages.

Subrogation is the right for an insurer to legally pursue a third party that caused an insurance loss to you.  This is done as a means of recovering the amount of the claim paid by the insurance carrier to you for the loss.

If a claim involves water backup, for example, our agency and your insurance company might ask: Can we subrogate the city for water backup claims?  The answer is: It depends.

If our agency receives notice for such a loss from you, an investigation is required to determine if the city, township or county were responsible for the damages.  Responsibilities of the city, township or county can include any of the following:

  • Maintenance
  • Blocked sewer lines
  • Malfunctions

When a governmental entity is negligent for a loss, subrogation needs to happen quickly.  Subrogation involving governmental entities such as cities, townships or counties requires a notice of intent as soon as the loss occurs.  Some have a 30-day notice requirement.

Documentation of the loss is imperative when submitting a subrogation demand to a governmental entity.  Here is what you can do to help document your changes:

  • Snap photos of areas damaged by water and all possessions to be disposed from the loss.
  • Make a detailed list (including ages and values) of possessions damaged from the loss and gather any receipts you may have for the damaged items.
  • Hold on to the broken water pipe or sump pump and make it available for inspection.

Like any claim, you need to take appropriate steps to avoid further damage; but be cautious regarding the disposal or replacement of products.  Keep receipts and invoices for any purchases or repairs you completed to help mitigate your damages.  Without documentation and evidence, collection for the paid claim, including your deductible, can be challenging.

Contact Hummel Group if you have questions about other insurance terms.

Source: Auto-Owners Insurance Update Newsletter April-June 2017