Subrogation
Definition:
The insurer’s right to pursue recovery from a third party responsible for a loss.
Explanation:
After paying a claim, the insurer may sue the responsible party to recover costs. Homeowners must cooperate with this process.
Example:
If a neighbor’s tree falls on your house and your insurer pays for repairs, the insurer may pursue reimbursement from the neighbor.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.