Subrogation
When your insurer recovers money from the at-fault party after paying your claim.
Full definition
Subrogation is the legal process where your insurance company steps into your shoes to pursue recovery from a third party who caused your loss. Example: someone rear-ends your car. Your collision coverage pays for your repairs quickly. Then your insurer pursues the at-fault driver's insurer to reclaim those costs. If successful, you may receive your deductible back.
Real-world example
A distracted driver totals your car. Your insurer pays you $18,000. Your insurer then sues the at-fault driver's insurance and recovers $18,000. You get your $500 deductible back.
Quick summary
When your insurer recovers money from the at-fault party after paying your claim.
Related terms
- Deductible
The amount you pay out of pocket before insurance kicks in.