Subrogation is an area of insurance law whereby the insurer pays the policyholder, who then authorizes the insurer to collect reimbursement from the party at fault. It is a two-step process: the insurer pays out the policyholder and then seeks reimbursement from the party responsible for the incident. It allows the victim's insurance company to be compensated, while protecting the at-fault party from any direct contact. Subrogation also enables the insurer to recoup any expenses incurred with regards to the claim.

In most countries, the right of subrogation is enshrined in law and is an important part of the insurance process. When a claim is made, the insurer investigates the matter and determines who was at fault and pays out the amount. The insurer then seeks reimbursement from the other party’s insurance company. In most cases, the liable party’s insurance company is responsible for reimbursing the victim’s insurer, and if such a settlement is not made, the matter can be taken to court if necessary.

Subrogation is most commonly associated with automobile accidents although it can apply to property damage and medical expenses as well. When a negligent driver is at fault for causing a car accident, the driver’s insurance company typically pays the medical expense or property damage incurred by the victim, and then subrogates the payment to the negligent driver’s insurance company. In this way, subrogation helps to ensure that the victim receives a prompt and sufficient payment for their losses, while also avoiding any direct contact between the parties.

Subrogation is an important aspect of insurance law and it is important to be aware of this right before making a claim with an insurance company. It is also important to remember that subrogation can be a lengthy and difficult process, and it is important to seek legal assistance if needed.