Subrogation, as a key tool in traffic accident insurance, subrogates the insurer to the rights of the injured party against the at-fault party after the payment of compensation, enabling an effective right of recourse. This article explores the legal regime, conditions of realization, effects, and challenges of this institution through a comparative approach between Iranian and French law. The research objectives include delineating the legal framework of each system—the Insurance Law of 1937 and the Compulsory Third-Party Insurance Law of 2016 in Iran, grounded in Islamic jurisprudential principles such as La Darar (no harm) and Tasbib (causation); and the French Insurance Code (Article L.121-12) and the Badinter Law of 1985, featuring legal subrogation and direct action. It also analyzes the differences, such as Iran’s emphasis on full payment versus France’s flexibility (partial payment), and proposes practical reforms like establishing a damage guarantee fund similar to the FGA, digitizing the recourse process, and providing judicial training. The research method is comparative-analytical, relying on statutes, legal doctrine, judicial precedents (the Supreme Court of Iran and the French Court of Cassation), and traffic statistics (Iran’s Traffic Police and the French Road Safety Observatory). The findings indicate the relative superiority of the French system, which offers greater speed and efficiency due to a three-year limitation period, broad scope (including the at-fault driver), and dynamic procedures. In contrast, Iran faces jurisprudential ambiguities, conflicts involving the Central Insurance, and judicial delays. The main proposal is the adoption of an amendatory insurance bill modeled on the French system to ensure the prompt compensation of damages, reduce financial burdens, and promote traffic justice. These modifications will render Iran’s insurance system more efficient and aligned with global standards, significantly contributing to the mitigation of road-related challenges.