What is the right of subrogation?

The right of subrogation is a legal principle that allows one party, typically an insurer, to step into the shoes of another party to claim their rights or seek recovery from a third party after compensating them for a loss. This means that after an insurer pays a policyholder for a covered loss, it can pursue any responsible third parties to recover the amount paid. Subrogation helps prevent the insured from receiving double compensation for the same loss and allows insurers to mitigate their losses.