The right of subrogation gives the insurer the same rights as the lender to recuperate their money. If, for example, the insurer has paid out money under a MIG to the lender to cover a mortgage shortfall, and the lender has 12 years to recover a shortfall then so too does the insurer. If the lender only has 5 years left to recover a shortfall then again so does the insurer. If a borrower has acknowledged the shortfall to the lender and the 12 year limitation has restarted then it restarts for the insurer too etc. etc. As Melody has said it is a question of law, not whether it is mentioned in the terms & conditions of you mortgage. The legal argument seems to be based on s5 of the Mercantile Law Amendment Act 1865. Two cases also back this view up 'Romaina v Scuba TV 1995' and 'Orakpo v mansion Investments 1978'. Not all financial advisers appear, however, to support this view, although personally I think the subrogation argument is pretty strong. See the posting 'On the MIG question'. I am not a legal professional though, so please, as always, check this out with one. I hope this makes it clearer.(posted 7739 days ago)Mark.