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Subrogation

TL;DR

Subrogation is the insurer's right, after paying a claim, to step into the policyholder's shoes and recover the amount from the party responsible for the loss.

Details

Subrogation prevents double recovery and shifts the cost back to the at-fault party. Policies often describe the insurer's recourse rights and any cases where recourse against the insured is possible (for example after an excluded circumstance).

Sources

  • General principles of insurance and tort law.