subrogation definition

Subrogation, After Appliance Fire What to Expect

Starting with the dictionary, subrogation definition is the substitution of one person or entity for another, especially when substituted party becomes responsible for a debt or legal claim.

Simple definition is the process of recovering amounts paid under an insurance policy by a third party.

Definition used by the insurance industry is the right of the insurer to pursue legally a third party that causes an insurance loss to the insured.


Subrogation Parties:

  • The insured or policyholder: party who has suffered a loss
  • The insurer or insurance company: party who has compensated the insured for all or part of the loss
  • Tortfeasor, company or manufacturer: party who is responsible for the damages through negligent acts

How Subrogation Work

Recently worked a loss where Ms. Jones started her dishwasher before leaving for work. She worked second shift.

A few hours later she received a call from the fire department saying you need to come home it was a fire at your residence.

Later they told her it was caused by the dishwasher. She was in panic and disarray. Not knowing what to do. She got on her phone and made several calls that’s how we got the referral.

Insurance Company Adjuster and Investigators

Couple day later we meet the insurance company and investigators. They ask a lot of questions to determine if it’s fraud or something they can subrogate.

Once they taped off the kitchen, like it was a crime scene. They asked us to stay out don’t touch anything in the kitchen. I knew they were going to subrogate.

When insurance companies subrogate, their goal is to recover all the expenses incurred from the incident. That is exactly what happen in this case.

But here’s the best part …. We were able to get policy limits for Ms. Jones, home and personal property. She was thrilled with the results. She able to make some long awaited improvements and glad we could help in trying times.

Purposes of Subrogation

There are two primary purposes of subrogation:

  • It allows you the insured to benefit from working with your insurer for easy claims handling
  • It allows the insurance company recovery of all funds paid on your claim settlement.

The two benefits can only be realized if you the insured is cooperative during the entire claims process, not to harm the chance of your insurer to subrogate. How so?

  • For one, you are not allowed to independently settle the claim with the party liable as this would hamper the insurer’s ability to subrogate and be reimbursed what was paid to you.
  • One of the requirements of the policy is always be cooperative with investigations. There are cases, you may have to appear in court or provide testimony depending on the claim process.

Subrogation Summary

Understanding subrogation definition, is really beneficial to the policyholder. Make sure you never tamper with the scene and always be cooperative with the insurance company it’s a condition of the policy. For questions, Claim Consultation or Policy Review Call Today!



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