What is 'subrogation' in property insurance?

Subrogation is the insurer's right to step into the insured's shoes after paying a claim and pursue any third party legally responsible for the loss. For example, if a neighbor's tree falls on the insured's house due to the neighbor's negligence, the insurer pays the insured's claim and then has the right to sue the neighbor (or the neighbor's insurer) to recover the payment. Subrogation supports the indemnity principle by ensuring the truly responsible party bears the financial burden. It also helps keep insurance premiums down for everyone. The insured generally cannot waive subrogation rights or settle with the responsible party for less than the full damages, as that would defeat the insurer's right. Workers compensation and uninsured motorist coverage have specific subrogation rules.