What is Subrogation?
The right of an insurance company to pursue a third party who caused the loss to recover the amount paid on a claim.
Understanding Subrogation
After paying a claim, insurers can "step into the shoes" of the insured to recover from the at-fault party. For example, after paying for car repairs, your insurer may sue the other driver. Subrogation can affect personal injury settlements as insurers may claim part of the recovery.
Examples
- 1Health insurer seeking reimbursement from car accident settlement
- 2Auto insurer suing at-fault driver after paying collision claim
- 3Workers' comp carrier recovering from negligent third party
Related Terms
Lien
A legal claim against a settlement or judgment that must be paid before the injured party receives their money, typically held by medical providers or insurers.
Uninsured Motorist Coverage
Insurance coverage that protects you if you're injured by a driver who has no liability insurance or insufficient coverage to pay for your damages.
No-Fault Insurance
An auto insurance system where each driver's own insurance pays for their medical expenses and lost wages regardless of who caused the accident.
Total Loss
When a vehicle is damaged to the extent that the cost of repairs exceeds the vehicle's actual cash value, or when the vehicle cannot be safely repaired.
Bad Faith Insurance
When an insurance company unreasonably denies, delays, or underpays a valid claim, or fails to properly investigate or defend its insured.
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