What is subrogation?
Subrogation occurs when your insurance company seeks reimbursement for your medical expenses and/or vehicle damage directly from the negligent party. In essence, your insurance company steps into your shoes to sue the at-fault party on your behalf. Although not all insurance companies will subrogate for medical expenses, they may do so against the other driver’s insurance company or your health insurance company.
It is the right of an insurance company to recover from a legally responsible third party, such as a non-owner pilot, for the payment of a covered claim to its policyholder, such as a flight school. This right to “subrogate” is found in almost every insurance policy and upon payment of a claim entitles the insurance company to all of the policyholder’s legal rights of action against responsible third parties for the loss paid. It is common practice for insurers of flight schools to “subrogate” against renter pilots to recover their payment for damage over the deductible.
Answer. An insurance carrier may reserve the “right of subrogation” in the event of a lossThis means that the company may choose to take action to recover the amount of a claim paid to a covered insured if the loss was caused by a third party. After expenses, the amount recovered must be divided proportionately with the insured to cover any deductible for which the insured was responsible.
