Answers.com defines subrogation as “the substitution of one person for another, especially the legal doctrine of substituting one creditor for another.” In insurance speak, this means the insurance company steps into the shoes of the insured in seeking recovery from a third party, who actually caused the loss.

This is easy to see in simple cases, such as car accidents, when the at-fault driver's insurer is slow to pay for repairs to your car. You have the repairs made through your own insurer, which, in turn, seeks recovery (subrogates) against the at-fault drive or his insurance company.

We at FC&S frequently hear from disgruntled subscribers about how those subrogation recoveries should be divvied up.