Principle of Subrogation

The Principle of Subrogation allows an insurance company to step into the shoes of their insured after compensating a loss, so they can pursue recovery from the third party responsible. Essentially, once the insurance pays for a loss caused by someone else, the insurer gains the legal rights to seek reimbursement from that liable party. This prevents the liable party from avoiding responsibility and helps keep insurance costs manageable by recovering costs that would otherwise be borne by the insurer and insured.