subrogationiin

Subrogation is a legal principle that allows one party to step into the shoes of another party to pursue a claim against a third party. This typically occurs in insurance contexts. When an insurance company pays a claim to its policyholder for a loss caused by a third party, the insurer often gains the right of subrogation. This means the insurer can then pursue the at-fault third party to recover the amount it paid out in the claim.

The purpose of subrogation is to ensure that the party ultimately responsible for the loss bears the financial burden. It prevents the insured from recovering twice for the same loss, once from their insurer and again from the at-fault party. It also helps to keep insurance premiums lower by allowing insurers to recoup some of their claim payouts.

For subrogation to apply, there must generally be a primary obligation owed by a third party that the insurer has satisfied on behalf of its policyholder. The insurer's rights against the third party are usually no greater than the rights the policyholder had against that third party. Subrogation can arise through contract or by operation of law. It is a common feature in many types of insurance, including auto, property, and health insurance.