It's appropriate to take a moment to assess the state of subrogation, especially in today's environment. Certainly, we cannot address every aspect of what is currently happening in the subrogation arena in this article alone, but let's briefly discuss a particular concern that warrants awareness. The stakes involved with subrogation have indeed changed.

Let's imagine for a moment that it is 1970. Your insured has just reported that his home has been completely destroyed by an early morning fire. You are relieved to hear that the entire family escaped unharmed as you begin the process of handling the claim. Based on what you've learned, you begin the investigation by visiting the scene. A complete fire investigation ensues, and the origin and cause report indicates the newly installed hot water heater was improperly wired and caused the fire. The scene is appropriately protected and all interested parties are placed on notice and provided an opportunity to inspect the property and the origin of the fire.

The claim process moves forward, and the first-party portion of the claim is settled with the insured, less his $250 deductible. The paid loss amounts to more than $100,000. The subrogation process is explained, and the insured is happy to hear that the insurer will attempt to recover the deductible amount in addition to the amounts paid by the company. The insured is so satisfied that he writes a letter to the CEO of the company expressing his gratitude for the level of service provided.