What happens when your organization suffers a loss through the fault of someone else who is unable or unwilling to compensate for the loss? For Fund Members, in-house claims adjusters conduct thorough investigations and gather evidence to support the liability of the party at fault. The Fund pays for the member’s covered damages (minus deductibles) and then refers the claim to a recovery specialist.
When processing claims, the Fund’s goal is to ensure that any party responsible for a member’s loss ultimately covers the cost. This process is called subrogation.
How does the subrogation process work?
By paying the claim, the Fund essentially takes an assignment of the member’s rights against the responsible party, or asserts the right of recovery on behalf of Administrative Services Only (ASO) members. Because of this, TASB Risk Management Services has a dedicated in-house subrogation adjuster that seeks recovery of funds paid for losses caused by a third party. When a member suffers a loss, our claim adjusters initially conduct a thorough investigation. If a third party is determined to be liable, our subrogation adjuster puts that party on notice of our subrogation interest, then pursues recovery when the payments are complete.
For Auto and Property claims, we seek what we paid our member, the Fund’s expenses, and the member’s deductible. For Workers’ Compensation claims, that means all medical paid, indemnity paid, and expenses paid. Of course, the Fund can only pursue recovery amounts based on the percentage of liability of any third party.
To increase the chances of a successful recovery, the Fund encourages members to promptly notify the adjuster of any subrogation opportunity. Adjusters use the utmost professionalism and courtesy to secure loss recovery; however, if the responsible party is unwilling to resolve the matter, the Fund may turn to collection agencies or even litigation.
When we handle subrogation, we stand in your shoes and pursue a loss on your behalf.
How can I help increase the chances of a successful recovery?
Subrogation cases can take a long time to resolve, but there are things members can do to help make the process work more efficiently:
- Promptly notify the Fund of any claims. Even if a responsible third party indicates they or their insurance carrier will “take care of it,” you should notify the Fund immediately. While you may work out a direct settlement, a satisfactory final agreement may not be reached, and the subsequent delay in allowing the Fund to handle the claim may terminate the Fund’s subrogation rights.
- Have evidence, such as photos and documents, ready to submit. Photos are especially helpful in revealing points of impact in auto collisions.
- Report an auto accident or crime-related occurrence to the police immediately. It is imperative to obtain a police report case number, and if possible, a copy of the report. The police report usually contains insurance or other identification information of the parties involved.
- In the event of an auto accident, obtain the other driver’s name, address, telephone and license number, as well as the name of their insurance carrier. Drivers should also obtain the license plate number and description of all vehicles involved, especially if there are not any police officers at the scene. If there are any witnesses, every effort should be made to obtain their contact information as well.
- For claims arising out of damages caused by a defective product, the member should preserve the defective product as evidence until the subrogation adjuster determines how best to preserve the item.
All of this information is gathered to substantiate a loss and it is important not to discard anything that would be helpful with this process.
What kinds of claims can be subrogated?
The Fund pursues recovery for Auto, Property, Crime, and Workers’ Compensation claims. As experts in the risk management industry, the Fund is positioned to provide members with the very best in comprehensive risk management services.
The Fund also pursues recovery for property, crime, liability, and workers’ compensation claims. Property claims involving arson, burglary, or vandalism will usually involve the local district attorney. Sometimes the courts will award restitution to the victims. If the district attorney contacts the Fund Member directly regarding a loss, it is important to include the Fund in any settlement arrangements. The Interlocal Participation Agreement provides that the Fund is entitled to recover the full amount of its claim payments and expenses prior to the distribution of remaining funds to the Fund member.
For claims arising out of damages caused by a defective product, the member should preserve the defective product (as evidence) until advised by the recovery specialist that the subrogation claim is concluded. Do not allow anyone to take possession or inspect the defective product unless directed to do so by the recovery specialist.
If you have any questions about subrogating claims, please contact Subrogation Adjuster Olivette Garcia-Holub at 512.505.2485.
Editor's note: This article was originally published in December 2015 and has been updated for accuracy and comprehensiveness.