subrogation defined
Subrogation is the substitution of one person or entity in the place of another with reference to a lawful claim, demand or right, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or securities. In the context of insurance, insurance companies generally have the right to step into the shoes of the party whom they compensate and to sue any party the compensated party could have sued. Black's Law Dictionary (1992). "[T]he right of subrogation is a right based upon considerations of equity and good conscience, the goal of which is to place the burden of the debt upon the person who should bear it." Allstate Insurance Co. v. Clarke, 364 Pa. Super. 196 (1987).
A typical example of subrogation occurs when an insurance company reimburses a homeowner for damage caused by a fire and then sues the manufacturer of a defective product (coffee maker, space heater etc.) that caused the fire. By paying for the damages, the insurance carrier acquires its insured's right to pursue the party responsible. In addition, most insurance policies contain provisions which transfer the insured's rights to the insurance company after payment and which require the insured to cooperate with the carrier in its pursuit of that claim.
At Gaul & Associates, P.C., we have extensive experience working with insurance carriers and their insureds to aggressively investigate and pursue claims for subrogation.
