Subrogation is a big word that can mean big money to the Society and our members. So here's what subrogation is and how you can help Mutual Assurance.
Subrogation In a Nutshell
Subrogation is when Mutual Assurance tries to recover money that has been paid out for a claim from a responsible party (other than our member) if that party is legally liable for the loss.
This protects you and the Society from paying for a loss that is not your fault. In layman's terms, we stand in for you and assume your right to pursue a "wrong-doer."
Here's an example of a claim with subrogation potential:
You've purchased a brand new dishwasher and installed it in your kitchen. Two weeks later, you see that your floor is starting to warp. You realize this just-out-of-the-box appliance is leaking!
Your emotions now fall somewhere in the range of frustrated to incensed and while it may be tempting to call your plumber or the manufacturer and read them the riot act, call us instead. Since we handle these sorts of problems all of the time, let us help you manage it. It will be better for you and for Mutual Assurance.
Call Mutual Assurance First
If you don't need emergency help from a plumber or electrician, we'd like to talk to you before you do anything else. Why? Because we need proof (evidence) to pursue subrogation damages if the installer or manufacturer is to blame.
If you feel any property damage is the fault of a responsible third party (not a burst pipe or a rusted-out water heater), take these four steps and call our claims department:
Preserve the appliance and/or any associated parts until your adjuster can secure them properly.
Have the appliance and installer information handy, plus any receipts, service tickets, and owner's manuals.
Take pictures of the damage and the appliance or item you think caused the damage.
Please don't allow anyone to take items off-site or make repairs until your adjuster advises you it's OK to do so.
How do you benefit from subrogation?
Mutual Assurance makes every effort to recover as much of the paid claim as possible, including your policy deductible. You are successful in recouping some or all of your deductible to the same degree that we are successful in our recovery of the damages amount claimed. In other words, if we can recover 100% of the damages amount claimed, you recover 100% of your deductible. Successful subrogation recovery also helps Mutual Assurance keep expenses down, resulting in minimum lower assessments for all policyholders.
Example of a missed opportunity
A homeowner purchases a new kitchen faucet with a pull-down spray function that looks sharp in her recently remodeled kitchen. After going to the store and buying some chrome polish to keep the new unit sparkling, she opens the cabinet to put it away under the sink, and water comes gushing out. She can't see or hear any running water, but her cabinet is warped, and everything in it is ruined.
Rather than calling Mutual Assurance first, the homeowner contacts the plumber who installed the device to come back and fix it. The plumber notices that one of the faucet's gaskets is cracked and tells the homeowner it is faulty and needs to be replaced. He removes the faucet and tells her he'll return to install another new one once the cabinet is replaced.
The homeowner contacts Mutual Assurance to file a claim, but without the faucet, we cannot make a solid case whether the item is defective or the plumber is to blame (who could have cracked the gasket during installation).
In legal terms, the "disappearance of the faucet" is called "spoliation of evidence" – the deliberate, negligent, or accidental destruction of evidence - and can limit our ability to file a successful claim of our own.
After a lot of back and forth, the manufacturer agrees to pay 50% of the damages, and the plumber says he won't pay any. As a result, Mutual Assurance is out 50% of the claim payment damages, and our assured is out 50% of her deductible. If our adjuster had been able to get to the home to see if the plumber or a defective faucet were to blame and held onto the faucet as evidence, we might have successfully recovered 100% of the damages and deductible.
Please call Mutual Assurance first in any claim situation. When it comes to subrogation, the more we can discuss the details upfront, the more success we can have in the end. It's just another way we all look out for each other.