Subrogation: What It Means for Auto Insurance

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Key Takeaways

Subrogation is a legal principle that enables one party to step into the shoes of another, giving them the authority to seek compensation or file a claim on their behalf.
In insurance, subrogation happens when the insurance company assumes your rights following a covered loss, helping you to recover costs from the responsible third party.
Because car insurance laws vary depending on where you live, not every claim or expense will be eligible for subrogation. The best way to know for sure is to contact your insurance company directly.

What Is Subrogation?

Subrogation refers to the process by which one party acquires the rights of another to pursue reimbursement or legal action after a covered loss. Subrogation is common in the insurance industry, where the insurance company takes over the insured’s rights to get compensation from the party that caused the damage. It’s often used to help recoup losses or reimburse deductible payments.

Simply put, subrogation insurance protects you and your insurer from paying for losses that aren’t your fault.

What Is a Subrogation Example?

Here’s an example of how subrogation insurance works:

You get rear-ended, and the other party is deemed at fault.
You report the accident to the other person’s insurance company and file a claim.
The other driver’s insurance pays for your repairs and medical bills.
If the other company is taking too long to pay you, your insurance company may exercise its insurer’s subrogation rights.
Your insurer files a subrogation claim against the other driver and seeks recovery for the money it paid you as well as your deductible.

What Is the Purpose of Auto Subrogation?

Both you and your car insurance company may sometimes have expenses following an accident you didn’t cause. Auto subrogation aims to prevent this by returning these costs to those not at fault. This is one reason why car insurance is important. Without it, you wouldn’t have an insurer to help recover money you spent for an accident you weren’t responsible for.

Auto subrogation has its benefits even if you don’t get into an accident. That’s because the subrogation process helps car insurance carriers keep insurance policy premiums down by shifting the costs to the insured at-fault driver and their insurer.

What To Expect During a Subrogation Insurance Claim

As part of the car insurance claims process, your insurer will tell you if it will file a subrogation claim. This doesn’t mean your insurance company will do this for every not-at-fault claim. Keep in mind that state car insurance laws vary, so some claims or expenses may not be eligible for subrogation. Your insurance representative can tell you whether your claim is eligible for subrogation.

Subrogation is typically something you’re not involved in. Your insurance company handles the entire process, so it shouldn’t impact your driving, insurance contract or record. However, it may impact your insurance rate.

If your insurer’s subrogation claim is settled, you may not get your deductible back unless the full amount is received. For instance, if your insurance company only gets 70% of the money back from the other company, you might not be fully compensated for your car insurance deductible.

Remember:

Subrogation is a way to help cover your expenses after an accident you didn’t cause. Without car insurance, you’d have to pay these expenses out of pocket – even if you weren’t at fault.

driver protected by knowing subrogation meaning

How Long Does the Subrogation Process Take?

There isn’t one answer to how long the subrogation process takes. For example, if the other driver has insurance, is 100% at fault and doesn’t contest your claim, it might be a fairly quick subrogation process. On the other hand, it can be a longer process if an uninsured driver is at fault or it’s unclear who’s responsible for the accident.

Different circumstances can impact how long subrogation takes.

Uninsured Drivers

Since uninsured drivers don’t have coverage, it can lengthen the subrogation process, because your insurer will have to pursue legal action against the other driver directly.

Fault Is Unclear or Both Drivers Are at Fault

If it’s unclear who’s at fault or if both drivers are responsible, it could affect the results of the subrogation process. If you’re partially at fault for an accident, your insurer may only be able to recover part of your costs or none at all, depending on state law.

What Is a Waiver of Subrogation?

A waiver of subrogation prevents your insurance company from exercising subrogation rights against the at-fault party. You might sign a waiver if the at-fault driver wants to propose a settlement with you. Before you sign any waiver or agreement, it’s a good idea to consult with your insurer. Not every auto insurance company allows its policyholders to sign waivers of subrogation or do anything that can affect its efforts to recover payment.

Get Car Insurance From The Hartford

If the subrogation meaning, indemnification or other aspects of insurance are unclear, The Hartford is here to answer your questions. It’s our team’s job to help protect you and your loved ones out on the road. Get a car insurance quote for AARP^® Auto Insurance from The Hartford¹ today or call 855-546-9099.

Frequently Asked Questions About Subrogation

What Is Subrogation in Insurance?

The subrogation meaning in insurance refers to the process where your insurer acquires your rights after a covered loss to get reimbursement from the party responsible for the damage. This helps you recover costs or your deductible and ensures you’re not left paying for losses that weren’t your fault. Subrogation can apply to other types of coverage beyond auto insurance, including property insurance.

What Is a Subrogation Clause?

A subrogation clause in an insurance policy gives the insurer the right to get money back from a third party responsible for a covered loss after the insurer has already paid the claim. This clause allows the insurance company to "step into the shoes" of the insured and seek reimbursement from the party at fault, helping you to recoup any financial losses.

Is Subrogation a Lawsuit?

Subrogation is not the same as a lawsuit. While subrogation can sometimes involve legal action if the responsible party does not pay voluntarily, the process itself is not automatically a lawsuit. Most subrogation claims are handled between insurance companies without going to court.