Claims · Insurance Term
Subrogation
Definition
Subrogation is the insurer's right, after paying your claim, to step into your shoes and recover the money from whoever caused the loss. It lets you get paid by your own insurer quickly, while the insurer pursues the responsible party afterward.
In Plain English
Suppose a contractor's mistake starts a fire in your building. Your property insurer pays your claim under your policy, then may sue the contractor or its liability insurer to get that money back. If the recovery succeeds, you may also get part or all of your deductible back.
Subrogation rights come from your policy and from the law. Most policies require you to do nothing after a loss that harms the insurer's ability to recover, such as signing a release with the party at fault.
Contracts can limit subrogation. A waiver of subrogation in a lease or construction contract gives up the right to recover from a specific party. Many property policies allow you to agree to such a waiver in writing before a loss, but your policy's wording controls.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a tenant's space heater causes $200,000 of fire damage to your building. Your insurer pays you $190,000 after a $10,000 deductible, then pursues the tenant's liability insurer. If it recovers in full, it may reimburse your deductible too.
What to Watch For
- Do not sign any release or settlement with the party at fault without talking to your insurer first.
- Keep damaged items and evidence until the insurer says they are no longer needed.
- Check leases and contracts for waivers of subrogation, and confirm your policy allows them.
- Ask your adjuster whether your deductible will be included in any subrogation recovery.
Last updated October 14, 2026 · Primesure editorial team · How We Write