Subrogation

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DEFINITION of 'Subrogation'

A term denoting a legal right that is reserved by most insurance carriers. Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.

BREAKING DOWN 'Subrogation'

An example of subrogation is when an insured driver's car is totalled through the fault of another driver. The insurance carrier will reimburse the covered driver under the terms of the policy and then pursue legal action against the driver at fault. If the carrier is successful, it must divide the amount recovered after expenses proportionately with the insured to repay any deductible paid by the insured.

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RELATED FAQS
  1. Do contractors require subrogation clauses for their contract workers?

    Contractors often require subrogation clauses for their contract workers. To prevent a building owner's insurance company ... Read Full Answer >>
  2. Is a waiver of subrogation clause better for a tenant or a landlord?

    A waiver of subrogation clause is good for both a tenant and a landlord. A waiver of subrogation is a two-way agreement in ... Read Full Answer >>
  3. What happens if my insurance claim falls below the deductible level?

    Though the ins and outs of health insurance are often confusing, the concept of the insurance deductible is relatively straightforward. ... Read Full Answer >>
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    The deductible you pay on your health insurance policy may be tax-deductible if you meet certain conditions. However, whether ... Read Full Answer >>
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    Like all equity investments, insurance companies present investors with market risk. Insurance companies, like banks, also ... Read Full Answer >>

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