What You Should Know About Subrogation Insurance Claims

Getting into a car accident and filing a claim can mean dealing with your insurance provider to cover costs as part of the incident. During this process, you may come across a funny word called “subrogation.” In this guide, we’re breaking down what subrogation in insurance means and how it works.

What is Subrogation in Insurance? | Metromile

What is a subrogation insurance claim? 

If you’re dealing with a claim and see “subrogation”, it’s natural to wonder what is subrogation in insurance. According to the Merriam-Webster Dictionary, subrogation is “the assumption by a third party (such as a second creditor or an insurance company) of another’s legal right to collect a debt or damages.” (fun fact: this term was first used in the 15th century, notes Merriam-Webster). 

In other words, subrogation is the legal process that allows your insurance provider to act on your behalf to recoup costs related to an accident from a third party, such as another insurance company. 

When does subrogation happen? 

When you file a claim after an accident, your insurance company will work with you to determine who is at fault and what is or is not covered as part of the accident. If the other driver is at fault, your insurance provider can act on your behalf to recover costs from the other party’s insurance company. 

Let’s say you get into an accident where you’re not found at fault and need to make repairs and cover potential medical bills ASAP, but the process is held up with the other party’s car insurance. In that case, your car insurance provider will typically cover those expenses upfront to make the process smoother and more efficient. 

Subrogation will then occur and your car insurance provider will seek to recoup the expenses related to the accident, including the deductible, car repair costs, and medical expenses, if applicable. 

Through subrogation in insurance, you as the policyholder can file your claim and move on faster, while your insurance company does the heavy lifting to recover costs. 

Does subrogation occur when it’s not clear who’s at fault? 

Subrogation in auto insurance happens when your car insurance provider seeks payment for expenses already paid from the at-fault driver’s insurance company. So what happens if it’s not fully clear who’s at fault in the accident? While some accidents may have a clear-cut cause and party who is “at fault”, not all do. 

In this case, what happens next can vary by your car insurance policy as well as the state you live in. For example, you might pay your deductible, and your car insurance provider may pay out the remaining expenses. 

It’s also possible that your car insurance provider can go the subrogation route to recover some costs if you’re not 100 percent at fault. Through subrogation, it’s possible to get your deductible cost paid back as well on top of the other costs the insurer paid. 

How long does an insurance company have to subrogate?

The subrogation process can vary but largely happens between the two car insurance providers. Your car insurance provider supports you in your claim and through subrogation, they aim to get reimbursed for expenses when the fault is determined. It could take months or even longer to determine who is at fault in some cases, so subrogation benefits the policyholder and helps the insurance provider recover funds related to a claim. 

If you’re curious how long does an insurance company have to subrogate, it depends on the state’s statute of limitations. 

According to Legal Beagle, “When an insurance carrier or other entity pays a claim for an injured client that is not at fault for their injuries, the insurance company may then attempt to recoup payments from the party that is at fault for the incident. The process of recouping paid claims is called subrogation. Each state sets its own statute of limitations, indicating the length of time after an incident an insurance company may file a subrogation claim.”

Legal Beagle notes that most states have one to six years to file subrogation insurance claims. 

What a waiver of subrogation means (and what to be aware of) 

During the subrogation process, your insurance provider acts on your behalf to recover costs based on your claim from the at-fault driver’s insurance company. Your insurance company does the hard part, and you don’t have to think about it too much. 

But if the at-fault party would like to settle the claim with you directly and without insurance interference, then you’ll need to sign a waiver of subrogation. 

A waiver of subrogation is forfeiting the ability for your insurance company to recover costs. Because the other party wants to settle, a waiver of subrogation signs your rights away so that the insurance company doesn’t have any legal right to get reimbursed. 

Obviously, this is a pretty big deal, so it’s important to discuss with your insurance carrier before making any decisions or moving forward with a waiver of subrogation. 

The bottom line 

Subrogation insurance claims mostly involve your insurance provider, but it’s good to be aware of what this process is and how it works. It’s especially important to be mindful if you’re considering signing a waiver of subrogation. Be sure to stay in touch with your insurance provider if you have questions about your claim or if you’re thinking of settling and signing a waiver. 

If you want to check out different car insurance options, consider pay-per-mile car insurance, ideally suited for low-mileage drivers. Why pay more than you need to, when you can simply pay for the miles you drive? Get car insurance that makes sense and never pay more than you should. Get a quote for pay-per-mile coverage with Metromile today. 


​​Melanie Lockert is a freelance writer, podcast host of the Mental Health and Wealth show, and author of Dear Debt. She’s a cat mom to two jazzy cats, Miles and Thelonious, an amateur boxer, music lover, and needs coffee to function.