Subrogation — Insurance Claims Definition
The insurer's right to pursue a third party who caused the loss, after paying the insured, to recover amounts paid.
After paying a covered claim, the insurer steps into the shoes of the insured (subrogates) to recover from a negligent third party — another driver, a manufacturer, or a contractor. Recovered funds may reduce future premiums or reimburse the insurer depending on state law and policy terms.
Waivers of subrogation in contracts affect whether the carrier can pursue a project partner. Health and auto policies commonly include subrogation clauses.
Examples
Your insurer pays collision damage then sues the at-fault driver's insurer to recover what it paid, including your deductible in some states.
Common Mistakes
Signing a release with a tortfeasor without insurer consent can void coverage. Insureds do not always get subrogation recoveries returned — depends on state and whether deductible was collected.
