The principle of subrogation in insurance means that an insurance company has the right to take over the rights and claims of the insured person after paying the claim. This means that the insurance company can stand in place of the insured person to deal with the third party, who may have caused the loss or damage, in order to recover the amount paid as claim. In other words, the insurance company can sue the third party for the amount of the claim paid to the insured person. This principle helps the insurance company to reduce their losses and also ensures that the insured person is not paid more than the actual loss suffered.