Subrogation Clause

What Does Subrogation Clause Mean?

A subrogation clause is a common provision in insurance policies that grants the insurance company the right to sue a third party for insured losses on behalf of the insured. This allows the insurance company to recover the amount it paid to the insured for the loss. Typically, the process takes place behind the scenes, without the insured’s direct involvement. Because subrogation only kicks in after you’ve filed a claim, the steps you take right after an incident can affect how smoothly it goes, which is why it helps to know what to do after a car accident before one ever happens.

Insuranceopedia Explains Subrogation Clause

For example, if a third party causes an accident that totals your car, your insurance company compensates you for the loss and gains the right to sue the at-fault party on your behalf. If the insurance company wins the claim, some companies may reimburse your deductible, depending on the amount recovered. How aggressively an insurer pursues subrogation, and whether they pass any of the recovered money back to you, can vary between the best car insurance companies, so it’s worth asking about the process before you buy a policy.