Subrogation

Subrogation 

Subrogation is the legal concept of substitution of one person in the place of another regarding a  lawful claim, lawsuit or other right. Subrogation commonly occurs in insurance matters, when an insurance company which pays its insured client for injuries and losses then sues the party which the injured person contends caused the damages to him/her. In this example, the insurer is called the subrogee and the insured in called the subrogor with regard to the claim against the person being sued. A subrogee is the party which has the legal right to attempt to collect a claim of another (subrogor) in exchange for paying the other's expenses or debts claimed against a third party.

There are different categories of subrogation.

Legal or equitable subrogation arises by operation of law where one pays a debt owed by another under circumstances that in fairness entitles the payor to the security or obligation held by the creditor. Conventional subrogation is based on an understanding or agreement, expressed or implied, when an uninterested or unrelated party to the matter who pays the debt of another and thereby becomes entitled to the rights and securities of the creditor.

Subrogation in many situations

Subrogation can occur in property/casualty insurance when a company pays one of its insured's for damages, then allows the insurance company own claim against others who may have caused the loss, insured the loss, or contributed to it.

For Example: Suppose another driver runs a red light and your car is totaled. You have insurance on your car, so you call your insurance carrier and they pay you for all of your expenses related to the accident. Your insurance company, realizing that the other driver had an insurance policy, then seeks reimbursement from the at-fault party's insurance carrier. Your insurer is “subrogated” to the rights of your policy and can “step in your shoes” to recover any amount paid out on your behalf. This is the definition of subrogation.

Medical coverage subrogation

Another  example relates to your own health insurance coverage on your  employer provided insurance or from medicare or medicaid. Suppose, you are in a car crash caused by the fault of another driver. Medicare or your health insurance carrier pays for your medical bills. It is "subrogated " to the claims for recovery of the amount paid for the medical bills as agaits the driver who was at fault. 

Contractual Waiver of Subrogation

In situations where parties to a landlord-tenant lease, or a car rental agreement or in a construction contract, or on a fire contract there may be many parties who are parties to the contracts and in those contracts there may be waivers of subrogation rights. For example if a tenant in a building cause a fire by negligence, and the landlord's insurance carrier provides the money to re-build. Does the landlord carrier have a right to be subrogated against the tenant for its negligence in teh fire? The answer may be in whether the contracts have waive of subrogation provisions, or the law in the state deals with the issue. 

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