What type of subrogation occurs when an insurer pays a claim on behalf of an insured?

Conventional subrogation occurs when an insurance company pays a claim on behalf of an insured and then assumes the right to pursue recovery from a third party responsible for the loss. This process is a common practice wherein the insurer and insured have an agreement or understanding that allows the insurer to step into the shoes of the insured to seek reimbursement.

In conventional subrogation, it is often established through the insurance policy or contract terms, which explicitly outline the rights of the insurer after a payout. This type of subrogation primarily stems from the mutual agreement between the parties involved, thus giving the insurer the ability to recover its expenses while protecting the insured’s interest.

The other forms of subrogation—legal, statutory, and equitable—have different origins and requirements, often relying on specific laws or established legal principles rather than an agreement between the insurer and insured. Understanding this distinction helps clarify why conventional subrogation is directly tied to the contractual relationship between the insurer and insured.