Subrogation

Subrogation in insurance is the process by which an insurance company that has paid a claim on behalf of its insured seeks to recover the amount of the claim from a third party who may be responsible for the loss or damage. In other words, subrogation allows the insurer to step into the shoes of its insured and seek reimbursement from another party.

For example, if you are involved in an auto accident and your insurance company pays for the damages to your car, your insurance company may then seek reimbursement from the other driver's insurance company, if the other driver was at fault for the accident.

Key features of subrogation include:

• It is a common practice in the insurance industry to help reduce costs for insurers and their policyholders.
• The insurance company may have the right to recover the amount of the claim, as well as any costs associated with pursuing the claim, such as legal fees.
• The insurance company must have paid a claim on behalf of its insured in order to have the right to seek reimbursement through subrogation.
• Subrogation can occur in various types of insurance claims, including property damage, personal injury, and healthcare claims.
• The right to subrogation may be included in the insurance policy or may be granted by law in certain circumstances.
• Subrogation can also be waived or limited by agreement between the parties involved, such as in a settlement agreement.