Subrogation Recovery Estimator

ANA›Life Services Authority›National Calculator Authority›Subrogation Recovery Estimator

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Subrogation Recovery Estimator

Estimates the net subrogation recovery an insurer can expect after pursuing a third-party tortfeasor, accounting for comparative fault, legal/investigation costs, and deductible reimbursement obligations.

Total Claim Paid by Insurer ($)

Total indemnity + expenses paid on the claim

Insured's Deductible ($)

Amount the insured paid out-of-pocket (must be returned first)

Third-Party Liability Percentage (%)

Estimated fault % attributable to the third-party tortfeasor (0–100)

Probability of Successful Recovery (%)

Likelihood of actually collecting from the third party (0–100)

Estimated Legal & Investigation Costs ($)

Attorney fees, court costs, investigation expenses

Administrative Cost Rate (%)

Internal overhead as a % of gross recovery (typically 3–10%)

### Subrogation Recovery Estimate

Total Claim Paid— Gross Recoverable Amount (× Liability %)— Expected Gross Recovery (× Success Probability)— Less: Deductible Reimbursement to Insured— Less: Legal & Investigation Costs— Less: Administrative Costs— Net Insurer Recovery— Recovery-to-Paid Ratio— Pursuit Recommendation—

function subFmt(n) { return n 100) errors.push("Liability % must be between 0 and 100."); if (isNaN(recoverChance) || recoverChance 100) errors.push("Recovery Probability must be between 0 and 100."); if (isNaN(legalCost) || legalCost 50) errors.push("Administrative Cost Rate must be between 0 and 50%."); if (!isNaN(deductible) && !isNaN(totalLoss) && deductible > totalLoss) errors.push("Deductible cannot exceed Total Claim Paid.");

if (errors.length > 0) { errEl.innerHTML = errors.join(""); errEl.style.display = "block"; return; }

// --- Core Formulas --- // 1. Gross Recoverable = Total Loss × (Liability% / 100) var grossRecoverable = totalLoss * (liabilityPct / 100);

// 2. Expected Gross Recovery = Gross Recoverable × (Recovery Probability / 100) var expectedGross = grossRecoverable * (recoverChance / 100);

// 3. Deductible owed back to insured (prorated by liability %) // Industry standard: insured's deductible is returned proportional to liability % var dedReimbursement = deductible * (liabilityPct / 100) * (recoverChance / 100);

// 4. Administrative costs = Admin% × Expected Gross Recovery var adminCost = expectedGross * (adminPct / 100);

// 5. Net Insurer Recovery = Expected Gross - Deductible Reimbursement - Legal Costs - Admin Costs var netRecovery = expectedGross - dedReimbursement - legalCost - adminCost;

// 6. Recovery-to-Paid Ratio var ratio = totalLoss > 0 ? (netRecovery / totalLoss) * 100 : 0;

// 7. Pursuit Recommendation var rec, recClass; if (netRecovery

#### Formulas Used

1. Gross Recoverable Amount

Gross Recoverable = Total Claim Paid × (Liability % ÷ 100) Reflects only the portion of the loss attributable to the third-party tortfeasor under comparative fault doctrine.

2. Expected Gross Recovery

Expected Gross Recovery = Gross Recoverable × (Recovery Probability ÷ 100) Discounts the gross amount by the realistic probability of actually collecting from the third party.

3. Deductible Reimbursement to Insured

Deductible Reimbursement = Deductible × (Liability % ÷ 100) × (Recovery Probability ÷ 100) Under most state laws and the "made whole" doctrine, the insured's deductible must be returned proportionally before the insurer retains any net recovery.

4. Administrative Costs

Admin Costs = Expected Gross Recovery × (Admin Rate % ÷ 100)

5. Net Insurer Recovery

Net Recovery = Expected Gross Recovery − Deductible Reimbursement − Legal Costs − Admin Costs

6. Recovery-to-Paid Ratio

Ratio = (Net Recovery ÷ Total Claim Paid) × 100

#### Assumptions & References

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References

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