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Subrogation in Insurance: Its Waiver, & Other Things to Note
Feb 18, 2023

Understanding Subrogation, Waiver of Subrogation, and Other Things to Note About It

When you purchase an insurance policy, such as health insurance, your priority would usually be your financial safety along with that of your loved ones. However, there are situations wherein a third party may be responsible for the damage caused to you or your property. If such a situation arises where the third party refuses to take accountability for their action, you can pursue them through a principle in insurance known as subrogation. To know more about this legal principle, you can take help from the information given below.

What is subrogation?

Subrogation is a principle in insurance that allows your insurance company to legally pursue a third party on your behalf for damages to you, even if you have already been paid. The meaning of subrogation in simple words is that it is a way for the insurance company to recover the money that it has paid out to its policyholder in the event of a loss.

What are the types of subrogation?

There are several different types of subrogation, each with its own set of rules and procedures. They are:
  1. Equitable subrogation

This is the most common type of subrogation. In this, the insurance company is allowed to recover the money that it has paid out to its policyholder in the event of a loss. This is typically done by filing a lawsuit against the party that caused the loss.
  1. Statutory subrogation

In this type, if the damage is caused to your property by a third party, the need to involve your insurance company does not arise. You as the policyholder can approach the third party by yourself and reach an agreement with them. You would be compensated by them for the damages caused.
  1. Contractual subrogation

This type is based on the terms of a contract between the insurance company and the policyholder. In this type of subrogation, the insurance company may have the right to pursue a third party for the damages that it has paid out, but only if it is specifically stated in the contract.

Is subrogation mandatory?

Subrogation in insurance can be both beneficial as well as time-consuming for you at times. The downside of this principle is that it can keep you involved in legal tangles with the third party for a relative period. This may not allow you and the third party to enjoy peace of mind. However, you have the option of waiving the right of subrogation. When you waive off this right, your insurer also waives its right to pursue the third-party.*

Things to keep in mind

Subrogation can be a complex process, and  both the insurance company and policyholder need to understand their rights and responsibilities. For example, you as the policyholder may be required to cooperate with the insurance company in this process and may even be required to give a statement or testify in court. On the other hand, you have certain rights, such as the right to be notified of any subrogation action and the right to object to it. In addition, there may be certain limitations on the insurance company's ability to subrogate. This can include putting a limit on the amount of money that an insurance company can recover in a subrogation action. There can also be situations where both you and the third party have the same insurer, so to avoid a conflict of interest, the insurer can be prohibited from initiating this process.


Overall, this is an important principle that you should be aware of as it can benefit you in tricky situations. It is a complex process that requires a thorough understanding of the laws and procedures involved. By working closely with your general insurance company, you can ensure that your rights are protected and that you receive the full benefits of their coverage.   *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.  

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