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right to recover the amount of loss from the person causing

loss has to be transferred to the insurer who paid for the

loss and compensated the insured. This taking over of the

insured’s right by the insurer is called ‘subrogation’ in

insurance phrasing. In other words, on payment of the

claim, the insured’s right to claim from anywhere else gets

‘subrogated’ to the insurer.

Example: Suppose another vehicle breaks a red traffic light

and hits your car, which is damaged badly.

Now, if your car is insured; you will naturally claim the

damages and they will pay you for expenses related to the

accident. Your insurance carrier (the insurance company

who had issued you a policy), realizing that the other driver

also had an insurance policy, then will seek reimbursement

from the ‘at-fault’ party’s insurance carrier. Your insurer is

“subrogated” to the rights of your policy and can “step in

your shoes” to recover any amount paid out on your behalf.

This is the definition of subrogation.

 Proximate Cause –

The word ‘proximate’ means ‘nearness’ or ‘closeness’. The

concept is that the cause that is ‘closest’ (in its effect) to

the loss, is considered to decide whether a claim is payable

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