The insurer's right to recover from a responsible third party after payment.
Subrogation is the insurer’s right to pursue recovery from a responsible third party after the insurer has paid a covered claim.
Subrogation affects who ultimately bears the cost of a loss. It also helps explain why the insurer may ask the insured for documents, statements, or cooperation even after the claim payment has been issued.
If another party caused or contributed to the loss, the insurer may pay the insured first under the policy and then seek reimbursement from that third party or that third party’s insurer. The insured’s own contract usually requires cooperation so the insurer’s recovery rights are not prejudiced.
Subrogation is especially relevant in property, liability, and auto losses involving contractors, landlords, tenants, manufacturers, or other drivers. After the loss, the insurer may ask the insured for photographs, contracts, invoices, witness details, or other records that help preserve the recovery claim.
The timing matters. If the insured releases the responsible party too early or agrees not to pursue them without checking the policy obligations, that can complicate the insurer’s recovery position. In some Canadian auto-loss frameworks, direct-compensation or statutory recovery rules can also change how much traditional subrogation work happens behind the scenes.
The position can also be altered in advance through a waiver of subrogation, especially in commercial contracts where the parties agree that certain recovery rights will not be pursued after an insured loss.
If an insurer pays for water damage caused by a negligent contractor’s work, the insurer may later pursue recovery against that contractor or the contractor’s liability insurer. The insured may still be asked to provide the repair contract, photos, and correspondence so the insurer can support that recovery effort.
Subrogation is not the same thing as third-party liability, although liability coverage may be the source of the third party’s payment.
It is also not the same thing as the insured “making a second claim.” It is the insurer stepping into the recovery position after paying the insured.
Subrogation also does not mean the insured gets to ignore the claim file once paid. Cooperation duties can continue after payment if the recovery effort is still active.
Waivers of subrogation, contractual risk transfers, provincial rules, and the facts of the loss can all affect whether recovery is available or worth pursuing. A recoverable legal theory does not guarantee a practical recovery.