What is claim recovery

Claim recovery is called “subrogation”,  the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties. Which is a legal term meaning that the insurance company assumes the right of its insured to pursue a claim against a wrongdoer.

If your insurance company pays for damage to your car under the collision coverage, it will pursue its payment (and your deductible amount) from the party who was at fault for the accident. It will make a subrogation claim against that person’s insurance company. If it recovers all or part of the loss, you will get a pro rata share of your deductible back again.

Claim recovery also includes “salvage”. If your wrecked car was deemed to be a total loss (which means merely that it is financially impractical to repair it—not that it cannot be repaired), the wreck has value. It will be sold at an auto salvage auction to a salvage buyer. The money recovered goes to the insurance company that paid the claim. The salvage buyer will in turn sell undamaged parts to shops that are repairing other vehicles.