What does subrogation entail in the context of claims handling?

• A. Subrogation is insurer's pursuit of recovery from a negligent third party after paying a claim.
• B. Subrogation increases premiums.
• C. Subrogation denies claims.
• D. Subrogation is about discounting coverage.

Answer: (A)

Subrogation means the insurer, after paying your claim, steps into your shoes to pursue recovery from the person or party responsible for the loss. This transfers the right to seek compensation from the at-fault party (or their insurer) to the insurer, so you’re not paid twice and the insurer can recoup costs. The process involves establishing liability, gathering evidence, negotiating settlements, and potentially pursuing litigation if needed. Subrogation helps keep insurance costs down overall by letting the responsible party bear the expense for the damage. It’s not about raising premiums, denying claims, or discounting coverage—those would be unrelated actions to the claims process.