Subrogation (often referred to as “subro”) is a legal process that allows you (as the insured) and your insurance company (the insurer) to quickly pay for recovery costs following a covered accident or loss—such as medical expenses, property cleanup and restoration, or automobile repairs—and then recover some or all of those costs from another party (and their insurer—known as a third-party carrier) who was at fault for the accident or loss. In that case, your insurer is said to “subrogate” the other party’s insurer by “stepping into your shoes” and pursuing the claims you have against the party who caused the accident or loss (in whole or in part).

In other words, subrogation refunds you and your insurer for the expenses incurred following a covered accident or loss—including your deductible. Your insurer will probably do most of the work to subrogate against the other party’s insurer, and you, as the insured policyholder of the insurer seeking to subrogate or recover expenses paid, will only need to cooperate by providing information.

Waiver of Subrogation

A waiver of subrogation or subrogation waiver is an agreement that prevents your insurer from acting on your behalf to recover expenses from the party who was at fault for the covered accident or loss.

A waiver of subrogation usually comes into play when the party who was at fault (in whole or in part) for your accident or loss wants to settle your claims against them without involving your insurer. In that case, the at-fault party will usually ask you to release all claims you have against them in exchange for the settlement payment, and to waive any subrogation rights you and your insurer may have.

It is usually a good idea to have a lawyer review any waiver of subrogation agreement or settlement agreement another party asks you to sign following an accident or loss. You should also review your insurance policy to determine whether it allows you to waive your insurer’s subrogation rights.

In Pennsylvania, subrogation allows an insurance company to recover costs from a third party responsible for a loss suffered by the insured. After paying for the insured's losses, the insurer can 'step into the shoes' of the insured and seek reimbursement from the at-fault party or their insurer. This process can include recovering the deductible paid by the insured. The insured is typically required to cooperate with their insurer during the subrogation process by providing necessary information. A waiver of subrogation is an agreement that prohibits the insurer from pursuing recovery from the at-fault party. Such waivers may be requested by the at-fault party as part of a settlement to prevent the insurer from seeking reimbursement. It is important for individuals to consult with an attorney before signing a waiver of subrogation, as it can affect their rights and the insurer's ability to recover costs. Additionally, policyholders should review their insurance policies to understand the implications of waiving subrogation rights, as some policies may include provisions related to subrogation waivers.