Principle of Subrogation

Subrogation is one of the main principles of insurance. Subrogation refers to the right of an insurance company to pursue a third party that caused a loss to the insured.

For example, when an insurer pays a claim to a policyholder if a third party’s negligence caused the loss, the insurer may seek reimbursement from that third party.

The main idea behind subrogation is to prevent the policyholder from collecting double payments for the same loss. Instead, the insurer steps in and seeks recovery from the third party.

For more information, check out our article on Principles of Insurance.