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What is letter of subrogation


What Is a Subrogation Letter? Subrogation letters are drafted by a third party, typically an insurance company, as a tool to recover compensation on behalf of a claimant.

What is the purpose of subrogation?

"Subrogation," or "subro" for short, refers to the right your insurance company holds under your policy — after they've paid a covered claim — to request reimbursement from the at-fault party. This reimbursement often comes from the at-fault party's insurance company.

What is the actual meaning of subrogation?

Subrogation literally refers to the act of one person or party standing in the place of another person or party. It effectively defines the rights of the insurance company both before and after it has paid claims made against a policy.

What are the three important reasons of subrogation?

To make up for the compensation paid, your insurer can claim the (insured) right over that third party. You surrender your rights over the third party to the insurer. This transfer of all the rights, and remedies, from insured to insurer is called subrogation.