Subrogation is an insurer’s right to recover claim costs from the party responsible for the loss.
After paying its policyholder, an insurer may pursue the negligent person or organization that caused the damage. This prevents the responsible party from escaping financial responsibility and helps prevent the insured from receiving a double recovery.
Subrogation commonly appears in automobile, property, health, and workers’ compensation insurance. For example, after paying for repairs caused by another driver, an auto insurer may seek reimbursement from that driver or the driver’s liability insurer.
Subrogation differs from salvage. Salvage concerns the insurer’s rights to damaged property after paying a claim, while subrogation concerns recovery from a liable third party. Policy contracts may require the insured to cooperate with the insurer’s recovery efforts.