I try not to rant about mistakes that I see made during our premium, mod and claims reviews, by my subro SOS mini-rant (please excuse) for 2024 covers subrogation.

James Moore

Yes, good old subrogation was left behind when we all became specialists, leaving little to no generalists to have input on files.

Why subro SOS rant now?

We usually see one or two mishandling subrogation mistakes per month. Most of the “overlooked money left on the table” can be rectified by notifying the possibly responsible third parties by letter, not email, during the workers' comp claim process. I wrote about the subrogation pursual crisis during the pandemic.

Having handled and reviewed thousands of claims, some of the main issues seem to fade in and out on a cyclical nature, such as obtaining recorded statements or 24-hour three-point contact.

When the adjuster becomes the claimant

Before the pandemic, complicated subrogation matters were not pursued by adjusters.  Now, subrogation of any type, especially auto accident claims, can possibly return money to the file without a large effort. Not pursuing the partially/completely responsible third parties may leave a file with more paid than was necessary. A simple letter may get the ball rolling.

Subrogation from an adjusting point of view is defined as substituting another responsible party in an insurance claim. I will not go into the process, as this link goes to a number of articles that will help avoid my future subro SOS rants.

Bottom line

At a minimum, documenting the subrogation investigation answers many questions about any third-party involvement. Many times, we see the adjuster check the "no subrogation involved" block. An explanation of why there is no subrogation will avoid having a subro SOS on your hands where the adjuster may have to retrace several steps for years in the past.

Remember that the subrogation money does not sit there waiting to be claimed. If the policy has a limit of $30,000, and you come to the table after two years, the third-party policy may have been spent elsewhere.

End of my subro SOS rant.

This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.