What is the primary purpose of subrogation?

• A. To recover payment from a negligent third party.
• B. To recover payment from the insured.
• C. To increase premiums.
• D. To deny claims.

Answer: (A)

Subrogation lets an insurer recover the money it paid to the insured by pursuing the negligent third party. The primary purpose is to recoup payments from the party responsible for the loss, preventing the insured from bearing the cost twice and ensuring the at-fault party is held financially accountable. This mechanism also helps keep premiums stable for all policyholders by sharing the loss with the party responsible. It isn’t about collecting from the insured, it doesn’t directly increase premiums, and it isn’t a tool to deny legitimate claims.