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Simple English definitions for legal terms
Subrogation
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A quick definition of Subrogation:
Subrogation: When one person or company takes over the legal rights of another person or company. This can happen when someone owes money to one creditor, but another creditor pays off the debt and takes over the right to collect the money. It can also happen when an insurance company pays for someone's injury and takes over their right to sue the person who caused the injury.
A more thorough explanation:
Subrogation is a legal term that means one party takes on the rights of another party. This can happen when one creditor replaces another creditor or when one party takes over another's right to sue.
For example, when an insurance company pays a policyholder for an injury, the policyholder's right to sue the person who caused the injury is transferred to the insurance company. This is called subrogation. Another example is when a bank takes over a mortgage from another bank. The new bank becomes the creditor and the old bank's rights are transferred to the new bank.
Subrogation is important because it allows parties to transfer legal rights and obligations. It can also help ensure that the party who is ultimately responsible for a debt or injury is the one who pays for it.