What is 'subrogation' in insurance claims, and what is the adjuster's role?

Subrogation is the legal doctrine allowing the insurer to recover the amount paid for a claim from a third party who caused the loss. Common subrogation scenarios: (1) Auto — insurer pays for collision damage to its insured; subrogates against the at-fault driver's insurance; (2) Property — insurer pays for fire damage caused by a contractor's negligence; subrogates against the contractor; (3) Slip-and-fall — workers comp insurer pays for employee injury caused by a third party's negligence; subrogates against that party. The adjuster's role: (1) Investigate for subrogation potential during claim handling — who else might be responsible? (2) Preserve evidence — photographs, statements, expert reports needed later; (3) Document third-party negligence and damages; (4) Have the insured sign a subrogation receipt confirming the insurer's rights; (5) For straightforward claims, may handle initial recovery directly; for complex matters, refer to subrogation specialists or attorneys. The recovered amount typically reimburses the insurer; if the recovery exceeds the insurer's payment, surplus goes to the insured (especially their deductible). The insured generally must cooperate with subrogation efforts and not release the third party without the insurer's consent. Effective subrogation can reduce net loss costs by 5-15% across an insurer's portfolio.