Insurance is like a romantic relationship. As in the latter, the parties involved in the former also have their expectations, duties, responsibilities and rights for the relationship to be mutually beneficial.

As an insured, having suffered a loss which is covered by the policy, you have the right to seek compensation from the insurer. So also, the insurer, having compensated you, has the right to recover their outflow where there is a negligent third-party responsible for the loss.

As a loss adjuster and claims expert, one of my major responsibilities is the identification of possible means of recovery (in the course of adjusting a claim) and to also pursue such recovery by going after the negligent party or his/her insurer. Often times in adjusting a claim, I would find that the insured had taken it upon himself to absolve a third-party (whose negligence resulted to the loss) of the responsibility for the damage to their property. From experience, I discovered that this happens whenever;

  1. There is a fraudulent intent on the part of the insured. The insured would have received some recompense from the negligent party and would not want to disclose it to the insurer.
  2. Sometimes it is the insured’s attitude of not wanting to go after a negligent third-party on the premises that having insured the property, his insurer has only one duty – to indemnify the loss.
  3. At other times, the insured would bring up undue sentiments he/she would probably not have had if the property had not been insured.
  4. And lastly, ignorance on the part of the insured. Where the insured is ignorant of the fact that he is supposed to act as if uninsured and hold the other party liable. But, ignorance of the law is not an excuse.

Whichever way, the insurer is being placed in a disadvantaged position having been denied the opportunity to recover their cash outflow on the claim. And that brings us to the issue of Subrogation rights in insurance.


Subrogation is the right of an insurer to legally pursue a third-party that caused an insurance loss to the you the insured. The insurer, having compensated the you, takes up the your right to take action against the other party who damaged the your property. This is done as a means of recovering the amount of the claim paid by the insurer to you for the loss.

Subrogation in insurances arises only under property & causalty insurance and it is entrenched in every insurance policy except where the insurer has relinquished the right to the insured. It imposes a duty on the you the insured to act as if you had no insurance cover by ensuring that the negligent third-party was apprehended and held liable. It also imposes on you the duty to respond whenever you are called upon by the insurer in pursuance of their subrogation rights.

What happens when you have jeopardized your insurer’s subrogation rights?

One thing for sure is that an insurer cannot repudiate a claim on the account that they were denied their subrogation rights. Except where a fraudulent act was established against you. However, the insurer reserves the right to penalize you for the breach of the policy condition. Such penalty can take the form of deducting a certain percentage from what is due to you as compensation for the claim.

What happens when recovery is made from a negligent third-party?

Having been compensated, you have no right to the proceeds received by the insurer from exercising their subrogation rights. However, the insurer also has no right to recover more than their outflow on the loss. Therefore, where the amount recovered by the insurer is more than what they paid to you, they are duty bound to pay you the balance.

Can you request that you insurer forfeits their subrogation rights?

You might feel that you cannot go through the stress of running after a third-party and you don’t want to be held accountable for it. You can request that your insurer grant you a waiver by incorporating the “Subrogation Waiver Clause” into your insurance policy. This clause absolves you of the responsibility to go after a negligent third-party. Where underwriters agree to grant this clause, it is usually subject to the payment of an additional premium.

Thank you for reading. We would like to have your view and also know if this post has been of any benefit to you. Kindly leave a comment.


  1. It is not common but sometimes the sub-rogation can also be persuit in liability claims not only on property claims.It is the case where there is more than one liable person in the same event, but one of them is the first in the liability chain. Be aware. Great job on the text.

  2. Not a bad attempt, but I am always hesitant of those who proclaim themselves to be experts. You state that subrogation only occurs with property insurance-not true. One of the most common subrogation pursuits is for General Liability, Auto Liability, and Workers Compensation claims. Additionally, on some lines of insurance, the Insured has the policyholder right to waive subrogation. That right to be exercised must be in writing, and prior to any claim occurring. Once the claim has occurred subrogation may rarely, if ever, be waived. Hence Waiver of Subrogation endorsements which may be attached to GL, and work comp coverage’s.

    1. Thanks Prescott for your comment. Indeed, subrogation is not limited to property insurance alone. But property and casualty insurance. The correction is noted.
      However, on Waiver of Subrogation, I think we are saying the same thing. Where subrogation is waived, it would be expressly stated.

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