section of property insurance and liability insurance policies giving an insurer the right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid. For example, an insurance company pays a claim for $40,000 in damages to an insured storekeeper for losses caused by a negligent contractor working next door. The policy's subrogation clause gives the insurer the right to be subrogated to, or take on as its own, the storekeeper's claim and to sue the contractor for damages.

legal process by which an insurance company, after paying for a loss, seeks to recover the amount of the loss from another party who is legally liable for it.

surrender of rights by an insured against the third party to an insurance company that has paid a claim.