Definition Of Waiver Of Subrogation Rights Clause In Insurance

Definition of "Waiver of subrogation rights clause"

Kathi Obendorfer, Real Estate Agent RE/MAX Palm Realty

Endorsement to a property liability policy whereby an insurer gives up the right to take action against a third party for a loss suffered by an insured. Typically, under terms of the subrogation clause, the insurer, having paid an insured for a loss, takes over any rights possessed by the insured who has suffered the loss. For example, an insured, John Smith, is hit by another car while he is driving. His insurance company pays his claim and then may sue or attempt to recover damages from the other driver. In certain instances, the insured might want to get a waiver of subrogation rights from the insurer. For example, if a landlord assured a tenant that the tenant was not responsible for damage to the landlord's property, the landlord could make good on that promise only by getting the insurer to waive its subrogation rights. Otherwise, if the landlord's property was damaged by the tenant, the insurer would have to pay the claim and could then try to collect damages from the tenant.