Maximizing Subrogation Claims: A Little Work Upfront Can Pay Off in the End

Two key goals in subrogation are attaining swift resolution of the claim and avoiding unnecessary activities before and during the lawsuit. Doing this can minimize the effort before a lawsuit is filed so that the claim can be settled or pursued as soon as possible in hopes of maximizing the return. However, this approach also can create a situation where a claim is not thoroughly investigated, and it can result in a low recovery, if any, on what otherwise may have been a valuable subrogation claim.

In subrogation, a little more work on the front end can help maximize a claim. Each case is different and the perceived value at the outset will dictate the amount of investigation and effort that is justified. Once a potential claim is identified, completing a thorough investigation and submitting a comprehensive demand package may increase the ultimate recovery and avoid unnecessary delays during the litigation. A good claim investigation (e.g., thoroughly documenting the scene and obtaining recorded statements from witnesses) will reduce the amount of effort required later to reconstruct the incident and will help prepare a case for trial.

A comprehensive subrogation package can also reduce unnecessary delays and potentially avoid litigation altogether. A good approach is to first consider the age old golden rule of “do unto others as you would do unto yourself.” The materials should consist of the same materials that your insurance carrier would require to resolve a disputed claim. I am of the opinion that such a package should often include proofs of payment, photographs of the loss, any expert reports that may be available, and a simple statement of the facts along with an explanation of any unique or complex legal issues.

Remember this: If a potential subrogation claim has a sufficient value to consider pursuing it, then it should have sufficient value to justify a thorough investigation in the beginning. If litigation does happen, having comprehensive subrogation demand package materials together will enable the carrier and subrogation counsel to actively pursue the matter with the legitimate prospect of going to trial, and this could possibly prevent the case from dragging out unnecessarily over a period of months – and sometimes – years.

Subrogaton side note:

If you are interested in learning more about subrogation, here are two previous posts on the subject.