subrogation

Subrogation To understand subrogation it's important to know how society and the law defined subrogation. Subrogation by Webster's Ninth New Collegiate Dictionary is defined "the assumption by a third party of another's legal right to collect a debt or damages." Courts have defined subrogation as: "when one person has satisfied the obligations of another and equity compels that the person discharging the debt stand in the shoes of the persons whose claims has been discharged, …

…questions. One of which, did the bank really suffer a loss, if the bank did not have a legal obligation to reimburse its customers, then should the insurance company have to pay the claim? Should the bank be "placed in the shoe" of the customers? Or should the bank in fact be held legaly responsible for the well being of the deposit? These might in fact turn off customers from depositing their money this way.