Subrogation is the process where one party assumes the legal rights of another, typically by substituting one creditor for another. Subrogation can also occur when one party takes over another's right to sue.
For example, when an insurance company compensates a policyholder for an injury, the policyholder's right to sue the person responsible for the harm may be subrogated, meaning it is transferred from the policyholder to the insurance company.
[Last updated in June of 2024 by the Wex Definitions Team]