WalletHub, Financial Company
The purpose of subrogation is to prevent you and your insurance company from paying for damage caused by a third party. Through subrogation, your insurance company can recover money from the at-fault individual on your behalf after you file a claim. Subrogation also keeps rates low for policyholders and allows you to receive a claim payout before fault has been determined.
3 Benefits of Subrogation in Car Insurance
- Speeds up the claims process for policyholders.
- Refunds insurers for claims if their customer wasn't at-fault.
- Keeps premiums low for policyholders who aren't responsible for damage.
In car insurance, subrogation applies when a car accident occurs and the not-at-fault driver files a claim with their own insurance company. The not-at-fault driver’s insurance company then begins subrogation with the at-fault driver’s insurer in order to recover the amount of the claim. Drivers can often have their deductible reimbursed, too. Without subrogation, drivers would have to wait for fault to be completely determined before receiving a claim payout.
For more information, check out WalletHub’s complete guide to subrogation.
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