For example, it allows the customer’s insurance company to sue the person or organization that allegedly caused the customer’s loss or damage (e.g., the alarm installer or monitoring station).  The amount of the lawsuit depends on how much the insurance company has indemnified (i.e., paid to) its insured (i.e., the customer) on the insured’s claim.  In effect, the insurance company is seeking reimbursement from the person or organization that allegedly caused the loss or damage.  The insurance company “steps into the shoes” of the customer and can take advantage of any means available to the insured to recover from third parties who caused the loss.

When subrogation is waived by the customer in an alarm monitoring contract, the insurance company cannot sue in its customer’s name. Therefore, many insurance companies insist that its customers not sign any alarm contract or monitoring contract containing such a waiver (or ask that the waiver clause be struck out and initialed before the customer signs).  Even though the insurance company is not a party to the monitoring contract, it is still bound by the waiver because the insurance company has the same rights (and limitations) as its insured.