Insurance Law · claim
Subrogation occurs when an insurer who has paid a loss on behalf of an insured party acquires the right to pursue recovery from the third party responsible for that loss. This legal process enables insurers to recoup their costs and helps prevent the insured from receiving a double recovery.
There must be a valid obligation or debt owed to the insurer by the third party responsible for the loss.
What to prove: It must be shown that the third party is liable for the loss incurred by the insured.
The insurer must have paid out a claim to the insured for the loss incurred.
What to prove: Proof of payment made to the insured must be demonstrated, establishing the insurer’s financial interest in pursuing subrogation.
The insured must possess a right to recover damages from the third party.
What to prove: It must be proven that the insured had a valid claim against the third party prior to the insurer's intervention.
The insurer holds the burden of proof, usually required to establish its right to subrogation by a preponderance of the evidence.
Subrogation questions may ask about the rights transferred after payment and any potential obstacles to recovery from the third party. Be prepared to delineate the elements involved in establishing a right to subrogation.