What is 'subrogation'?

Subrogation is the substitution of one person or group for another with respect to a debt or insurance claim accompanied by the transfer of any associated rights and duties.

Subrogation typically arises in property insurance claims and health insurance claims.

Example 1

You are involved in an automobile crash that damages your brand new truck.  The damage costs $25,000 to repair.  You make a claim on your insurance to get your truck repaired quickly.

Your insurance carrier is now subrogated to your right to sue the other party and/or their insurance carrier for the $25,000 that it paid to you.

Example 2

As a result of the same automobile crash, you are injured. When you go to the doctor, you present your health insurance card to receive treatment for your injuries.

The total cost for medical treatment in your case is more than $150,000.

Because the crash was caused by someone else, your health insurance carrier is subrogated to your rights against the offending driver for the amount of medical expenses it paid (more than $150,000).

Loyd J. Bourgeois
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Disability, Personal Injury, and Divorce Attorney