What typically happens in subrogation cases?

In subrogation cases, the insurer seeks to recover funds from a third party that is responsible for a loss after it has paid the claim to the insured. This process is important because it helps insurers reclaim the costs associated with the claim, which can ultimately help keep premiums lower for policyholders. Once the insurance company pays the insured for their loss, it gains the rights to pursue any legal action necessary to recoup those costs from the negligent party or their insurance provider.

This means that if another party is found to be at fault for the incident that resulted in the claim, the insurer will take legal steps to recover the funds spent on that claim from that party, reinforcing the principle that the insured should not gain financially from the insurance payout while also holding the responsible party accountable.