in its most common usage refers to circumstances in which an insurance company tries to recoup expenses for a claim it paid out when another party should have been responsible for paying at least a portion of that claim.
More specifically, subrogation is the legal technique under common law
by which one party, commonly an insurer (I-X) of another party (X), steps into X's shoes, so as to have the benefit of X's rights and remedies against a third party such as a defendant (D). Subrogation is similar in effect to assignment
, but unlike assignment, subrogation can occur without any agreement between I-X and X to transfer X's rights. Subrogation most commonly arises in relation to policies of insurance
, but the legal technique is of more general application. Using the designations above, I-X (the party seeking to enforce the rights of another) is called the subrogee
. X (the party whose rights the subrogee is enforcing) is called the subrogor
In each case, because I-X pays money to X which otherwise D would have had to pay, the law permits I-X to enforce X's rights against D to recover some or all of what I-X has paid out. A very simple (and common) example of subrogation would be as follows:
- D drives a car negligently and damages X's car as a result.
- X, the insured party, has Collision insurance, and claims (i.e., asks for payment) under his policyThis illustrates the etymology of the term subrogate, in this context meaning "to ask for payment......