What is subrogation?

Subrogation is a legal concept that refers to the transfer of one party's rights or claims to another, typically arising in the context of insurance and indemnity agreements. In essence, when a party, often an insurer, pays a claim on behalf of an insured individual or entity, it gains the right to pursue recovery from any responsible third party. This process allows the insurer to step into the shoes of the insured and seek reimbursement for the damages or losses incurred.