Subrogation Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Subrogation, written in plain English, along with examples of how it is used.

What is Subrogation?

(n) subrogtion is the act by which the legal rights of clime is transferred to another person or legal entity who can by that subrogation avail all legal remedies the person who transferred such right hold. For example when an insurance company indemnify the loss occurred on a vehicle accident they gets the subrogation of rights of the insurer. If it was decided that the compensation was in excess or the court decided the compensation is not sustainable the insurance company can clime all the benefits which otherwise goes to the insurer

History and Meaning of Subrogation

Subrogation is a legal term that has its origins in the Roman law, and its concept involves the transfer of legal right from one person to another. It is often used in cases where insurance companies reimburse their customers for financial loss or damages, and then have the right to step into the shoes of the insured party and pursue the party responsible for the loss in order to recover the amount paid. This type of subrogation is known as "equitable subrogation". Subrogation can also arise through contract or statute.

Examples of Subrogation

Here are some examples of how subrogation could be used in different contexts:

  • If a tenant causes damage to a rented property, the landlord's insurance company may pay for the repairs and then seek to recover the amount from the tenant.
  • If a worker is injured on the job, their employer's workers' compensation insurance company may pay for their medical treatment and then seek to recover the amount from a third party whose negligence caused the injury.
  • If a bank lends money to a borrower secured by a property, the bank may have the right to step into the borrower's shoes and foreclose on the property if the borrower defaults on the loan.

Legal Terms Similar to Subrogation

Here are some related legal terms:

  • Assignment: The transfer of rights from one person to another, often used in the context of contracts.
  • Indemnity: A promise to compensate someone for losses or damages they may suffer.
  • Contribution: The sharing of losses or damages between parties who are deemed to be jointly liable.
  • Lien: A legal right or interest that a creditor has in a debtor's property as security for a debt.
  • Guaranty: A promise to pay for the debts of another if that person fails to pay.