Subrogation is the substitution of one person in the place of another with reference to a lawful claim or right. Subrogation commonly occurs in insurance matters, when an insurance company which pays its insured client for injuries and losses then sues the party which the injured person contends caused the damages to him/her. In this example, the insurer is called the subrogee and the insured in called the subrogor with regard to the claim against the person being sued. A subrogee is the party which has the legal right to attempt to collect a claim of another (subrogor) in exchange for paying the other's expenses or debts claimed against a third party.
There are different categories of subrogation. Legal or equitable subrogation arises by operation of law where one pays a debt owed by another under circumstances that in fairness entitles the payor to the security or obligation held by the creditor. Conventional subrogation is based on an understanding or agreement, expressed or implied, when an uninterested or unrelated party to the matter who pays the debt of another and thereby becomes entitled to the rights and securities of the creditor.