What does subrogation allow an insurer to do?

Subrogation is a legal concept that enables an insurer to pursue recovery of the costs it incurred in settling a claim. When an insurance company pays for a loss that was caused by a third party's negligence or wrongful act, subrogation allows the insurer to step into the shoes of the insured and seek reimbursement from that responsible party. This process helps insurers recoup some of their losses, ultimately keeping premiums more stable for all policyholders.

In the context of title insurance, if a title insurer pays a claim due to an error or omission in the title search caused by a negligent party, they can use subrogation to recover those costs from that party, thereby protecting their financial interests and allowing them to continue providing coverage to other insureds.