Subrogation refers to which insurer action?

Subrogation refers to which insurer action?

• A. Replacing the insured to recover from a third party after paying a claim
• B. Abandoning a claim
• C. Appraising the loss
• D. Salvaging damaged property

Answer: (A)

Subrogation is the insurer’s right to step into the insured’s shoes after paying a loss and pursue recovery from the party responsible for the damage. This is exactly described by replacing the insured to recover from a third party after paying a claim. After the insurer pays the claim, it can seek reimbursement from the at-fault party (and, if applicable, the insured’s deductible in some cases) to keep premiums fair and prevent double recovery. Abandoning a claim would end the process, not pursue recovery. Appraising the loss is about determining the amount of the loss, not pursuing third-party recovery. Salvaging damaged property refers to the handling and sale of damaged items to recover some value, not the insurer’s legal right to sue the third party.

Subrogation is the insurer’s right to step into the insured’s shoes after paying a loss and pursue recovery from the party responsible for the damage. This is exactly described by replacing the insured to recover from a third party after paying a claim. After the insurer pays the claim, it can seek reimbursement from the at-fault party (and, if applicable, the insured’s deductible in some cases) to keep premiums fair and prevent double recovery.

Abandoning a claim would end the process, not pursue recovery. Appraising the loss is about determining the amount of the loss, not pursuing third-party recovery. Salvaging damaged property refers to the handling and sale of damaged items to recover some value, not the insurer’s legal right to sue the third party.