Subrogation claims aid insurance companies in recovering expenses they pay out when they're not liable for damages. Subrogation is when a third party demands to be paid back out of your injury settlement for payments that they made up front.As a specific example, an insurance company that did not actually pay out a claim to the policyholder has no grounds for a subrogation claim. ' Subrogation has its origins in chancery and is based on the important public policy that the party causing a loss in the first place should bear the ultimate. Subrogation occurs when your insurance company pays for an accident, then works to recoup expenses from the at-fault driver's insurer. For example, if the policy's subrogation clause calls for an assignment, the insurer must procure the assignment from the insured to proceed. Subrogation is a legal action that an insurance company (the insurance carrier) takes to recoup the funds paid out in a claim from the atfault party. EXAMPLE: John has car insurance with State Farm. Bob rear ends John on the road causing damage to John's car. Why Would I Waive Subrogation Rights?
