"Subrogation is a windfall to the insurance company. It plays no part in rate schedules (or only a minor one),...it is arguable that since the insurance company is paid to take the risk of negligent losses, it should not shift the loss to another."
--Patterson, Essentials of Insurance Law (1935). Page 122
If the rule of subrogation did not exist, a policyholder could collect on insurance and also sue and/or collect against a responsible party who may have caused a loss. This would amount to a windfall benefit for the policyholder and just not something that seems equitable. So, in recent times we have settled on a prorated rebate system of sorts based on claim exposure. Still, that doesn't seem to balance the scales, considering the insurance company collected a premium to cover a risk it had bargained for, but ends up not having to pay. Because the company gets credit for all it paid pertaining to the claim, perhaps the policyholder should also get credit for all the paid insurance premiums that effectively pre-paid the claim: in other words divide the spoils equally 50/50 between company and policyholder. See full article.
