Purpose
A subrogation notice formally communicates the carrier's intent to pursue recovery from a responsible third party or their insurer. The notice preserves the carrier's right to recover amounts paid under the policy and puts the responsible party on notice.
When to Send
Subrogation notices should be sent after the carrier has made payment on the claim and liability investigation supports recovery from a third party. Timeliness matters — delays can prejudice the recovery effort and may raise issues with the statute of limitations.
Required Components
Payment Information
Identify the claim, the insured, the loss date, and the amount paid by the carrier.
Liability Basis
State the factual basis for the subrogation demand — why the recipient is believed to be responsible for the loss.
Demand Amount
State the specific amount being demanded in subrogation, including any deductible being pursued on behalf of the insured.
Response Deadline
Set a reasonable deadline for response and explain the consequences of non-response (e.g., referral to recovery counsel, arbitration demand).
Insured's Deductible
If the carrier is pursuing the insured's deductible as part of the subrogation effort, state that clearly and explain how any recovery will be allocated between the carrier and the insured.
Adjuster Guidance
- Send the subrogation notice promptly after payment — delays can result in evidence loss and statute issues
- Coordinate with the insured to ensure they do not inadvertently release the responsible party
- Include relevant documentation (police reports, estimates, payment records) with the demand
- Track statute-of-limitations deadlines for each jurisdiction
- If inter-company arbitration applies, follow the applicable arbitration forum rules