This article was written with the assistance of AI and edited by Angela Sabarese.
In a recent CLM webinar from the “Insurance 101” series, expert panelists Cortney Helfrich, Wilbur Group; Lovre Brajkovic, Nationwide Insurance Company; Sally Noma, Noma Law Firm; and Ashton Kirsch, Matthiesen, Wickert & Lehrer, S.C., talked about the fundamentals of subrogation.
Core Principles of Subrogation
The discussion covered subrogation's core principles, from basic definitions to advanced recovery strategies. Noma explained subrogation using a relatable example: "Say that you are a homeowner, and you have a stove, and one day your stove catches fire. Thankfully, you have insurance that will take you for all of the damage that occurred from that stove fire. But what happens with the insurance company after they pay that claim? The insurance company wants to know if there is any third party that they can pursue for that damage."
Key Strategies
Key themes emerged around early claim identification, evidence preservation, and the critical "golden hour" of investigation within 48 hours of loss. The panel emphasized that subrogation opportunities exist across all claim types, with Brajkovic noting that the industry misses approximately $15 billion annually in potential recoveries due to inadequate investigation and preservation efforts.
Kirsch stressed the importance of expert selection and negotiation skills, advocating for a plaintiff's mindset in subrogation work. "In subrogation claims, we are plaintiff's side," he explained, encouraging adjusters to think creatively about recovery opportunities. He emphasized relationship-building in negotiations: "You catch more flies with honey...I want them to smile when they pay me 100% on my claim."
The panel highlighted critical distinctions between equitable, contractual, and statutory subrogation, noting that state laws vary significantly. Understanding jurisdictional nuances, particularly regarding the made-whole doctrine and workers' compensation liens, proved essential for maximizing recoveries and avoiding bad faith exposure.