Waiver of Subrogation

Definition - What does Waiver of Subrogation mean?

A waiver of subrogation is a waiver in an insurance contract that limits the insurer's right to sue a third party in the event of a claim. Because these contracts often prevent the insurance companies from recouping funds from the third party, they typically charge higher in premiums for policies with these waivers.

Insuranceopedia explains Waiver of Subrogation

Waivers of subrogation are often used in construction contracts.

It may come into play, for example, when an auto insurer has a contract with a particular driver that has a waiver of subrogation and that driver is in an accident caused by another motorist. The waiver would prevent the car insurer from suing the third party who caused the accident. Or, if it allowed them to sue, it would limit the extent of the suit.

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