Subrogation

Subrogation is a legal principle that allows an insurance company to step into the shoes of the policyholder to recover costs after paying a claim. For example, if your car is damaged by another driver and your insurance covers the repair, the insurer can pursue the other driver (or their insurance) to recover that payout. This process helps insurers recoup their losses and can keep premiums lower for policyholders. Essentially, it's about ensuring that the responsible party ultimately bears the financial burden, rather than the victim of the incident.