What is the basis of conventional subrogation?

Conventional subrogation is based on a mutual agreement between parties involved, typically the insured and the insurer. This process allows an insurer who has paid a claim to "step into the shoes" of the insured and pursue recovery from third parties who may be responsible for the loss. In essence, subrogation enables the insurer to seek reimbursement, thereby reinforcing the principle that the insured should not profit from an insurance claim beyond their loss.

This mutual agreement is crucial because it defines the rights and obligations of both parties concerning the handling of claims and recovery efforts. When the insured signs a policy that includes a subrogation clause, they are consenting to the transfer of rights that the insurer will need to recover from third parties. Therefore, conventional subrogation relies fundamentally on this collaborative understanding rather than being an automatic or statutory process.

In contrast, options such as involuntary processes of law, public statutory requirements, or insurance company policies do not fundamentally address the reciprocal nature of the agreement underpinning conventional subrogation. While these elements may play roles in various legal or insurance contexts, the essence of conventional subrogation specifically hinges on the mutual consent between the parties involved.