Definition of Subrogation:
Subrogation is a term describing a legal right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss.
The substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.
When an insurance company pursues a third party for damages, it is said to "step into the shoes of the policyholder," and thus will have the same rights and legal standing as the policyholder when seeking compensation for losses. If the insured party does not have the legal standing to sue the third party, the insurer will also be unable to pursue a lawsuit as a result.
Substitution of one party (called the subrosee) for another (called the subrosor) as a creditor or possessor of a legal right. Upon subrogation, the subrosee acquires the claims, interests, ownership, remedies, or securities of the subrosor. In cases where a party pays for the debts of another party, the paying party becomes entitled to the rights belonging to the debtor. See also subrogation clause.
How to use Subrogation in a sentence?
- The insurer could not sue them in the owners name (exercising rights of subrogation under the insurance policy) because they were all entitled to indemnity under the same policy.
- Subrogation is a term describing a legal right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. .
- Subrogation makes obtaining a settlement under an insurance policy go smoothly. In most cases, an individual’s insurance company pays its client’s claim for losses directly, then seeks reimbursement from the other party, or his insurance company.
- Subrogation is most common in an auto insurance policy but also occurs in property/casualty and healthcare policy claims.
Meaning of Subrogation & Subrogation Definition