noun
subrogation
In plain English
When your insurer pays your claim and then goes after whoever caused the loss to get the money back.
If a contractor's tools start a fire in your house and your homeowners insurance pays $80K, the insurer will then sue the contractor's GL for the $80K. You usually never see this happen — but you may eventually get your deductible back if subrogation is successful.
What it covers
The insurer's right to step into the insured's shoes and pursue legal action against the at-fault third party to recover the amount paid on the claim.
What it does not cover
It is NOT optional. By accepting payment, the insured assigns those rights to the insurer. You can sign a waiver of subrogation in advance via endorsement, but you can't undo it after.
Where it trips people up
If you sign a contract waiving subrogation against, say, your landlord, your insurer won't be able to recover from them. Many leases require this. Always coordinate the waiver with your insurance.
The technical version
The legal right of an insurer, after paying a claim, to assume the rights of the insured to recover from the third party legally responsible for the loss.