What Is an Insurance Subrogation Claim?
Subrogation lets an insurer that paid a covered loss pursue recovery from the responsible party, subject to the policy and law.
A subrogation claim is an insurer’s attempt to recover from a responsible third party after the insurer has paid a covered loss. The insurer asserts the insured’s rights, so it generally cannot recover more than the insured could have recovered from that third party. For a business, subrogation can affect evidence preservation, settlements with the alleged wrongdoer and recovery of the policy deductible. Suppose a delivery truck damages a storefront. The property insurer may pay the business under its own policy and then seek recovery from the trucking company or its liability insurer. Subrogation helps prevent double recovery by the insured and can move the ultimate cost of the loss to the legally responsible party. The timing and scope of the insurer’s rights depend on the policy, applicable legislation and common law.
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