Wildfires are a significant problem in California that continues to grow due to climate change and drier weather conditions. Insurance companies absorb billions of dollars in losses from wildfire claims they pay to policyholders. Subrogation is a means for an insurance company to recover the cost of claim payouts from the party responsible for causing the wildfire.
Subrogation can significantly impact how much a victim ultimately recovers, therefore many California residents consult a wildfire lawyer to ensure their interests are protected while the insurance companies fight for reimbursement.
What Is Insurance Subrogation?
Insurance subrogation is a process that allows an insurance company to recover what it paid to a policyholder by holding the at-fault person or party liable, or financially responsible. The insurance provider can sue a third party through subrogation to seek a payout from the person responsible for causing the loss. In a wildfire claim, this could be one of the following parties:
- Utility company
- Contractor
- Landowner
- Railroad company
- Product manufacturer
- Individual
- Government agency or public entity
If an investigation discovers that a party other than the insurer that paid the initial claim caused the wildfire, the third party can be held accountable. Through subrogation, the original insurance company can be reimbursed for payouts given for property damage, business interruption, medical bills and other wildfire costs.
When Is Subrogation Available to Insurance Companies?
An insurance company can pursue a subrogation claim if there is evidence that a third party caused the wildfire. Negligence is often involved in these cases. In personal injury law, someone is negligent if they don’t use proper care in preventing harm to others. Wildfires can be caused by negligence such as a utility company failing to maintain its powerlines or individuals failing to properly put out campfires. An insurance provider must prove negligence or fault for the wildfire using evidence, such as company maintenance logs, proof of regulatory violations, photographs, video footage and forensic analysis.
Hurdles to Subrogation Claims
It can be challenging for insurance companies to successfully bring subrogation claims for wildfire cases. They must establish a direct connection between the third party’s negligence and the wildfire, often in the face of arguments alleging that the fire was caused by natural causes such as lightning. In addition, parties such as government agencies enjoy legal protections that can make claims against them difficult. To prove a subrogation claim, an insurance provider must have strong evidence against the third party.
How Could Subrogation Impact Your Wildfire Claim in California?
Insurance companies can recover millions of dollars through subrogation actions. These are claims that are not within the control of the original policyholder or wildfire victim. If you file a wildfire claim, your insurance provider may pursue reimbursement on its own or in your name. If so, you are required to cooperate with the subrogation claim as much as possible.
Once subrogation is initiated, you generally cannot bring your own lawsuit against the at-fault party without the consent of your insurance company. Filing a lawsuit for losses that extend beyond the limits of a policy is relatively common among wildfire victims. If the subrogation claim succeeds, your insurance company should reimburse you for any deductibles you spent when collecting coverage for your losses. For more information about a subrogation claim and how it may affect your recovery from a wildfire in California, contact Bridgford, Gleason & Artinian to schedule a free consultation with an attorney.