1. Legal right of an insurance company to recover monies or benefits from a third party who was at fault and is liable for the payment. When compared with coordination of benefits (COB), in which liability is shared between third parties, subrogation differs because it assigns the rights to another party. Also called right of subrogation . 2. Insurance policy provision requiring an insured to turn over rights he or she may have to recover damages from another party to the insurer, to the extent to which he or she has received reimbursement by the insurer.
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US: Legal right of one who has paid an obligation owed by another to collect from the party originally owing the obligation. Thus, Subrogation is the transfer of rights and remedies of the insured to the insurer who has indemnified the insured in respect of the loss.
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REINSURANCE: Process by which one insurance company seeks reimbursement from another company or person for a claim it has already paid.
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The assignment of a contractual right of an insured or reinsured by terms of the policy or a contract or by law, after payment of a loss, of the rights of the insured to recover the amount of the loss from one legally liable for it. The ceding insurer and reinsurer can agree how subrogation rights and recoveries will be addressed and handled under the reinsurance agreement.
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The right of an insurer which has paid a claim under a policy to step into the shoes of the insured so as to exercise in his name all rights he might have with regard to the recovery of the loss which was the subject of the relevant claim paid under the policy up to the amount of that paid claim. The insurer’s subrogation rights may be qualified in the policy. In the context of insurance subrogation is a feature of the principle of indemnity and therefore only applies to contracts of indemnity so that it does not apply to life assurance or personal accident policies. It is intended to prevent an insured recovering more than the indemnity he receives under his insurance (where that represents the full amount of his loss) and enables his insurer to recover or reduce its loss.
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The right of one party who has paid for the loss of a second party to obtain recompense from the third party who is responsible for the loss. For example, an insurance company becomes subrogated to the rights of its insured to the extent of the insurer’s payment for collision damage caused by the negligence of the other driver. Often explained as stepping into the shoes of another the insurer steps into the shoes of the insured and collects what they had paid to the insured from the at fault party.
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UK: the right of one person to stand in the place of another and avail him/herself of the rights and remedies of that other person, whether already enforced or not (for example, the right of an insurer who has indemnified a claimant to seek compensation from the person who caused the insured damage).
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UK: The right of the insurer who has granted an indemnity to take over any recovery rights the insured may have against third parties liable for the same loss. A subrogation condition in the policy enables the insurer to take action in the insured’s name before paying the claim. Subrogation may arise under contract, tort or statute (Riot (Damages) Act 1886). Example: insurer paying for a car damaged by a third party’s negligence can pursue the third party.