Subrogation

Subrogation in auto insurance allows the insurance company to recover expenses paid out on a third party claim. For example, suppose you file an auto insurance claim with your provider for an accident. In that case, your insurance company can pursue compensation for what they paid to you from the driver found at-fault for the accident. Through a subrogation auto claim, the insurance provider will sue the other driver and their insurance company on your behalf.

Free Auto Insurance Comparison

 Secured with SHA-256 Encryption

Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

Full Bio →

Written by

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

Full Bio →

Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Oct 30, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Subrogation is the principle that allows an insurer to recover the expenses that it has paid out on a claim from a 3rd party. It enables the insurer to take over the legal obligation of the injured party and pursue the right to legal remedy on their behalf. This requires an agreement between the insured party and insurer and is often a standard part of an insurance policy. The insurer in this instance is the subrogee and the insured party is known as the subrogor.

Example of Subrogation

subrogation

It’s best illustrated with an example:

  • Someone (let’s call them Party X) is driving negligently and they crash into your car, they are at fault for the accident.
  • You have an insurance policy with “Insurance Company A” and that policy includes collision insurance, and so you make a claim with your insurance provider to have them fix your car.
  • Insurance Company A then pays you the full sum (less the deductible) required to repair or replace your vehicle, as per the terms of your policy.
  • However neither you nor Insurance Company A is legally liable for the accident, that’s the responsibility of Party X.
  • In this instance Insurance Company A will then sue Party X on your behalf in an attempt to recover either some or all of the money they paid out to you under the terms of your insurance policy.
  • If Insurance Company A is successful in suing Party X for all or part of the claim they paid out to you, they will retain the money obtained. This is considered to be equitable as your car has already been repaired or replaced by Insurance Company A and you have not incurred any financial loss as the result of the legal action.
  • If however Insurance Company A is not only successful in suing Party X for their negligence but also wins an amount in excess of that which was already paid out to support your original claim, this excess would belong to you.
  • Once this process has been completed you lose the right to sue Party X personally, this is to prevent you from recovering the same loss twice – this would be unfair to Party X.
  • In the case of subrogation Insurance Company A will nearly always have to sue in your name, and you will be required to cooperate reasonably with the proceedings because of this.

Free Auto Insurance Comparison

Compare over 200 auto insurance companies at once!

 Secured with SHA-256 Encryption