Tag Archives: Remediation

What Is Subrogation? And how it matters to you.

Subrogation refers to the process an insurance company uses to seek reimbursement from the responsible party for a claim it has already paid.

Subrogation matters to you if:

  • You have a covered loss, and
  • You submit a claim to your insurance company, but
  • Another party is actually responsible for all or part of the damages (i.e. you have a car accident and the other driver caused the accident, or if damage to your home was caused by a faulty appliance)

In this case, your insurance company may pay your claim, and then seek reimbursement from the other party. This would depend on the circumstances surrounding the loss, the laws in your state, and your policy provisions.

If your company decides to pursue subrogation, the company will work to recover the damages from the responsible party. Damages may involve costs paid by you and the insurance company. Costs paid by you usually means your deductible, but could include amounts over your policy limits not paid by your insurance company. This would depend on the laws in your state and the specific circumstances surrounding the loss.

The subrogation process may also be used if you are at fault for damages. In this case, the other party and/or their insurance company would make a claim against you, usually directly to your insurance company. Your company will review the facts of investigation to determine if you are liable for the damages. Your company may make payment to the other company if you have coverage and it is determined that you would be legally responsible for all or part of the damages. Keep in mind that often times liability is not clear cut. In some cases, both parties may be partially responsible. Dependent on the laws in your state, both parties may share responsibility for payment of damages. For example, one party may be 40% responsible, and the other party may be 60% responsible. This could mean that both companies make subrogation claims against each other, and each company pays their respective portion of the other party’s claim.

In all cases, your participation and cooperation with us in the investigation phase of the claim process is important. Your assistance can help to establish important facts, and preserve evidence, and may help to accelerate the recovery process.

Reimbursement When Money is Recovered

If money is recovered, and part of the recovered amount was paid by you, (you paid your deductible, for example, but it was the other party’s fault) a reimbursement check will be issued. The reimbursement check is usually issued when money is received. Please note that practices vary based on the specific laws for your state.

The amount to be reimbursed is based on the amount claimed and the amount recovered. The amount claimed through subrogation depends on the amount each party was at fault. The amount recovered usually is divided proportionally between the insurance company and the insured, after expenses. This could vary based on the laws in your state.

 How Reimbursement Amounts are Calculated

Dependent on the laws in your state, you may be fully reimbursed for your deductible if:

  • The other party was 100% at fault
  • The other party paid the damages claimed in full
  • There were no collection expenses (i.e. collection agency) to recover the money.

 Often times though, it is not that simple. Based on the different factors that come into play, the calculation of the reimbursement amount can become quite complicated. The reimbursement of your deductible depends on several factors, including the amount recovered, the amount claimed (based on the amount the various parties were at fault), and state laws.

Generally, you would receive reimbursement of your deductible equal to your proportion of the total amount claimed to the total amount recovered, net of expenses. However, precisely how the reimbursement amount is determined varies by state.

These examples outline general rules that apply in many states—please discuss the specifics of your case with your subrogation claim representative.

 Example 1: Other party is 100% liable, but only paid part of the amount

The total amount of damages paid is $10,000. The other party was 100% responsible for the damages. Subrogation claim is for $10,000.

  • You paid $1,000 and your insurance company paid $9,000.
  • Your proportion is 1/10 or 10% of the total amount claimed—$1,000.
  • The amount actually collected is $5,000. There were no collection expenses.
  • You are reimbursed for $500, or 10% of the amount collected.
  • Your insurance company is reimbursed for $4,500.

 Example 2: Other party is partially liable; only paid part of the amount

The total amount of damages paid is $1000. The other party was 60% responsible for the damages. Subrogation claim is for $6,000.

  • You paid $1,000 and your insurance company paid $9,000.
  • Your proportion is 1/10 or 10% of the total amount claimed—$600.
  • The amount actually collected is $3,000. There were no collection expenses.
  • You are reimbursed for $300, or 10% of the amount collected.
  • Your insurance company is reimbursed for $2,700.

 Questions? Your Claims Representative Can Help.

Subrogation can be complex and non-intuitive. If you have questions, please let your claims representative know.

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Royal Water Damage is an IICRC Certified Firm

IICRC Certified Firm

Royal Water Damage – IICRC Certified Firm

IICRC Certified Firms have earned the right to display the cleantrust logo as a symbol of quality. In order to achieve IICRC-certified status, firms must meet a rigorous list of standards in business ethics and expertise. All IICRC Certified Firms must:

  • Present accurate information to consumers and conduct business with honesty and integrity.
  • Require a technician on all jobs who has been formally trained and passed all required tests.
  • Require a continuing education program to keep technicians up-to-date on the latest changes in the industry.
  • Maintain liability insurance to protect all parties in the event of an accident.
  • Maintain a written complaint policy and agree to Better Business Bureau or similar arbitration to resolve disputes, and accept the conclusions and recommendations of arbitration.

The IICRC actively has relationships with fiber producers, carpet and fabric mills, furnishing manufacturers and retailers, and others affiliated with the industry. The use of cleantrust  service professionals is specified in leading manufacturers’ maintenance brochures and warranties.

When it comes to cleaning, restoration and inspection, the IICRC writes the books

As an ANSI-accredited standard-development organization, the IICRC has led the way in establishing the main industry standards and reference guides for professional carpet cleaning, upholstery and fabric cleaning, water damage restoration and mold remediation.

Each IICRC standard takes years to develop and the coordination of several experts in the field, including allied tradespersons; manufacturers; international, national and regional trade associations; individual or franchise professionals; cleaning, inspection and restoration industry organizations; insurance industry; training schools; contractors; and public health professionals.

These standards are reviewed and updated at least every five years. Many of these fields, such as the water damage restoration field, change rapidly and those who are certified keep up with the advancement of the science and generally accepted practices of the industry.

The IICRC helps keep homes and businesses healthful

According to the Environmental Protection Agency, the average person spends 90 percent or more of their time indoors, where levels of pollutants may be two to five times (and occasionally more than 100 times) higher than outdoor levels.

This makes it extremely important to perform regular maintenance inside your home or business. In addition to vacuuming, cleaning and checking for water damage on a regular basis, using a certified technician for cleaning will help extend the life of your flooring and upholstery and ensure that your home or business is healthful for those who live and work there.

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Wall Street Journal guide to homeowners insurance

(Photo credit: Thinkstock)

Royal Water Damage Restoration 215-657-2244

Homeowners insurance protects your home, its contents, and, indirectly, your other assets in the event of fires, theft, accidents or other disasters.

A standard homeowners policy (known as an HO-3 policy) will protect you from things like fires and fallen trees. Notice how we didn’t mention floods or earthquakes—those events are specifically not covered by a standard policy and require additional coverage. Homeowners in some areas of the country may be required by their mortgage company to carry these kinds of policies.

A standard policy will also protect your possessions from said disasters as well as theft. But a standard policy is not a blank check: There’s a limit to how much you’ll be compensated. If you have specific items of value, such as jewelry or artwork, you can pay a little extra each year to insure them for their full replacement value.

Now, if someone is on your property and slips and falls and sprains his ankle, he might sue you for his medical expenses. Homeowners insurance covers your liabilities in this situation as well. And like the examples mentioned above, you can pay more for extra coverage. Homeowners insurance isn’t required by law, like auto insurance. But mortgage companies usually require you to obtain a policy before they’ll give you a loan.

How Much Coverage Do You Need?

Your home insurance policy should cover enough to entirely rebuild and furnish your home were it wiped off the map. Ask a home builder to walk through your home and give you an estimate of what it would take to rebuild; that figure should be the basis for how much replacement coverage you’ll need. Be sure to point out any unique and/or expensive details that would add to the replacement cost.

Once you’ve determined the replacement cost of your home, you’ll need to know what kind of coverage you want. There are a few key terms here:

Guaranteed Replacement Cost Coverage. This means that the insurer will pay for the rebuilding of your home no matter the cost. These policies are hard to find these days.

Extended Replacement Coverage Many insurers offer coverage that caps the payout at around 125% of your home’s insured value.

Inflation Guarantee (or Guard). This feature makes sure that your home’s insured value stays current with the marketplace.

If you get a reliable appraisal, extended replacement coverage and an inflation guarantee, you should be in good shape. The appraisal provides a realistic starting figure and the inflation guarantee makes sure that your home’s price stays current. The 125% coverage means that, even if construction prices outpace inflation, they probably didn’t outpace it by 25%, so you should have enough money for whatever work you need done.

One last thing: The law requires you to have flood insurance if you live in an officially recognized high-risk area. To find out your flood risk and to find plans (which are offered by the government), go to floodsmart.gov.

When it comes to protecting your possessions, you may want more coverage than your standard policy allows. If you have anything of exceptional value (a family heirloom, a piece of art, jewelry, etc.), you should insure it separately. Insurers will charge extra for this coverage (something like an extra $10 on your monthly premium per $1,000 of value insured), but it pays to be covered.

Also keep in mind that there are two different kinds of coverage when it comes to personal articles. There’s “actual cash value” and there’s “replacement cost.” You want coverage for replacement cost. “Actual cash value” is what you’d get if you sold your valuable today — a lower amount than what you initially paid. “Replacement cost” pays you the amount of money you’d need to buy a brand-new item to replace your old one.

Liability Coverage

Say a guest stays at your home and slips on the floor and sprains his ankle. He decides to sue you. Your homeowners policy includes liability coverage in case you lose the court case. Generally speaking, standard policies offer $100,000 to $300,000 of liability coverage.

Supplemental liability coverage can boost your protection to $1 million or more. If you don’t own a car, adding that kind of coverage can be relatively cheap—less than $100 per year—and isn’t a bad idea. If you do own a car (putting you at greater risk for causing damage to people and property), expect to pay $300 to $400 a year. Check out your auto policy to see what kind of coverage you already have.

Shopping for a Homeowners Policy

There are three kinds of home insurance companies and salespeople:

Direct sellers, who sell directly to consumers (GEICO, Progressive and USAA fall into this category).

Captive agents, who only sell one company’s insurance products (for example, State Farm and Allstate agents).

Independent insurance agents, who sell policies from many different companies.

It’s possible that all of these groups will deny your insurance application for anything from the risky pool of alligators in your backyard or the tornado that runs through your property every year. Don’t despair. Many states have state-sponsored insurance programs for the hard-to-insure. Search for your state’s FAIR (Fair Access to Insurance Requirements) plan if you’re having a tough time with the traditional insurers.

Your Deductible

Like auto or health insurance, your homeowners insurance has a deductible (the amount you must pay before coverage kicks in). Like those other policies, you should opt for the highest deductible you can afford. If you do, the cost of your insurance premium (the monthly bill you pay) will surely be lower. Plus, a low deductible forces your insurer to cover more of your costs — costs they pass on to you in the form of increased premiums.

Remember: You should not use insurance to cover every conceivable expense, just the big ones. If reinstalling a gutter will cost you $200, pay the $200 — don’t start filing claims for it. Insurers hate it when you file too many claims, and may raise your monthly premium or even cancel coverage because they’ll view you as too risky. It’s not about gutters—you want the insurance when you have to pay for a whole new roof.

A good rule of thumb to follow: If you can fix anything for less than $1,000, don’t file a claim

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Welcome To Royal Water Damage Restoration

Royal Water Damage 215-657-2244

We understand the urgency of EMERGENCY.

We understand the urgency of EMERGENCY. We take your calls live 24 hours a day 7 days a week and send our local technicians to you anywhere in the Philadelphia, Montgomery, Bucks, Delaware and Chester County areas. We respond within 45 minutes and get the job done right! We offer full Water Damage Repair, Water Removal, Smoke, Fire, Flood Cleanup, Storm Damage, Wet Basement Drying and Mold Services and we are available around the clock. We also offer a variety of Payment Plans and Insurance Billing. Our certified and dedicated professional technicians will get to your place quickly to repair the damage and prevent any further damage from happening to your home or office.

Whether it be a Flooded Basement, Burst Pipes, Fire and/or Smoke Damage, Water Damage Restoration, Sewage Overflow or Commercial Water Extraction, Royal Water Damage is available to repair the damage! We take pride in our work and assure our customers 100% satisfaction. Contact us now for all your flood, smoke, fire, water restoration, odor and mildew control and dehumidification needs anytime 24/7. Call us now (215) 657-2244 for a NO obligation FREE estimate and our certified technicians will arrive in 45 minutes or less.

 

Flood Clean Up and Water Damage Restoration

  • Removal and Drying
  • Dehumidification
  • Odor and Mildew Control
  • Complete Structural Drying
  • Wood Floor Drying
  • Wall Drying
  • Kitchen Cabinet Drying
  • Deodorize and Sanitize
  • Carpet Repair and Stretching
  • Upholstery Cleaning
  • Carpet Cleaning
  • Debris Removal
  • Tile and Air Duct Cleaning after Water Damage

Sewage Removal & Clean Up Services

  • Extract All Visible Contamination
  • Disinfect All Affected Areas
  • Odor removal
  • Complete Damage Clean Up
  • Tile and Carpet Cleaning after Sewage Damage

Smoke & Fire Damage Clean Up

  • Smoke Odor Removal
  • Structural/Content Cleaning
  • Structural Restoration
  • Complete Damage Clean Up
  • Tile and Air Duct Cleaning after Fire Damage

Some of our many service areas include:
Abington
Ambler
Bensalem
Blue Bell
Broomall
Chalfont
Doylestown
Eagleville
Glenside
Hatfield
Horsham
Huntingdon Valley
King of Prussia
Lafayette Hill
Media
Newtown
Newtown Square
Norristown
Philadelphia
Pottstown
Wayne
Yardley

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