What Happens if I Ignore an Insurance Subrogation Letter for Homeowner Property Damage?

Sometimes, insurance firms must compensate their clients for damages caused by other parties. The insurance company will attempt to subrogate or recoup the amount it paid on the claim from the party responsible for the harm. Care must be used when reviewing subrogation letters because the subrogation process may damage the recipient's legal rights.

Initial Interactions

There are several avenues for an insurer to obtain reimbursement from the responsible party. Occasionally, a simple phone call to the irresponsible party's insurer can remedy the situation. However, if the liable party is uninsured, the subrogation carrier must deal with her directly. If it is difficult to locate the negligent party, the insurer may get a background summary known as a skip trace.

There are Subrogation Letters

Subrogation adjusters issue letters to those who appear liable for reimbursing the insurer. The date of the claim, the amount paid by the insurer, a summary of the damages, and a request for the recipient to contact the insurance company are typical components of insurance claim letters. Although the letter does not impact the recipient's legal rights, it represents an opportunity to settle the matter outside of court. If the recipient disregards the letter, the insurer may continue sending payment requests or decide to bring a lawsuit against the liable party.

Lawsuits

Some law firms specialize in representing insurance companies in subrogation lawsuits. They file several cases knowing that many of the defendants will be uninsured and unrepresented. In numerous of these cases, the plaintiff obtains a default judgment. A defendant can prevent a default judgment by filing a written rebuttal with the court, known as an answer. However, the defendant will be at a disadvantage and may not understand court procedures without a lawyer. Defendants who wish to contest a subrogation claim often decide to retain legal representation.

Possible Defenses

If a defendant believes she is not responsible for the harm, she can challenge the case in court using evidence such as photographs and witnesses. In addition, if the insurer filed the claim too late, the defendant may assert that the statute of limitations has expired. If the lawsuit was filed promptly and the defendant agrees to owe the damages, she may offer to make monthly payments in exchange for dismissal of the litigation.