CLAIMS & POLICY MECHANICS
Subrogation, principle of definition
The principle of subrogation allows an insurer to recover claim payments from a third party responsible for the insured loss.
In practice, this means this is related to the principle of indemnity and it allows an insurer to recover from a third party (responsible for a loss) the costs that it has incurred in indemnifying its insured for that loss. This gives insurers, brokers, reinsurers and risk managers a shared way to discuss the concept when reviewing policies, claims, regulation or market data.
This term is especially useful in insurance market analysis, policy wording and risk transfer decisions. It helps users interpret insurance terminology consistently across markets, policies and risk data. It also helps users compare how insurance is structured, regulated, priced or claimed across different markets.
Subrogation, principle of is closely related to indemnity, contribution, claim recovery and third party liability. Linking these concepts together helps build a clearer glossary structure and gives readers a stronger understanding of how individual insurance terms connect within wider international insurance practice.
At a glance
- Used in
- Insurance market analysis, policy wording and risk transfer decisions.
- Purpose
- Helps users interpret insurance terminology consistently across markets, policies and risk data.
- Important because
- Clear definitions support better comparison of insurance products, market practices and regulatory requirements across jurisdictions.
- Related terms
- indemnity, contribution, claim recovery and third party liability.
Example of subrogation, principle of in insurance
An insurer pays a claim for damage caused by a negligent third party. Through subrogation, the insurer may pursue the third party to recover the amount paid.