Which statement best describes subrogation?

• A. Subrogation is the insured's right to pursue recovery from a negligent third party after payment.
• B. Subrogation is the insurer's right to pursue recovery from a negligent third party after payment, while ensuring evidence preservation and avoiding prejudice to the insured.
• C. Subrogation is the third party's right to review the claim before payment.
• D. Subrogation is a process to waive the insured's deductible.

Answer: (B)

Subrogation is the insurer’s right to recover from the negligent third party after the insurer has paid the claim to the insured. This means the insurer steps into the insured’s position to seek reimbursement from the at-fault party (or their insurer) for the amount paid, along with related costs, once payment has been made. It’s important that this process preserves evidence—documents, photos, and other proof—so the fault can be clearly established and the recovery is solid. It also aims to avoid prejudice to the insured, ensuring the insured isn’t unfairly harmed or left bearing the burden in the wake of the recovery efforts. The correct statement captures these elements: recovery after payment, with evidence preservation and protection of the insured’s interests. The other ideas don’t fit subrogation: it’s the insurer’s right, not the insured’s directly; it isn’t about a third party reviewing the claim before payment; and it isn’t about waiving the deductible.