When you get into a car accident, your insurance company will reimburse you for the damages as quickly as possible. But if you didn’t cause the crash, they work with the other driver’s insurance company to recoup the payout. This process is called subrogation, and while drivers don’t usually get involved, it’s helpful to understand the process in case you ever have to sign a waiver of subrogation.
What is subrogation?
Subrogation is a legal process that is used in various types of insurance claims, including auto, home and health insurance. Essentially, it’s the legal right for an insurance company to reimburse a policyholder for a loss and seek repayment from the third party that is responsible for the damages.
The process of subrogation makes it easier for policyholders to get a settlement after a major loss. With subrogation, the insurance company assumes the financial burden of the policyholder and tries to get the payout from the party or company that is at-fault. Subrogation is a common process, although many drivers aren’t aware of it.