One purpose of Subrogation is to?

One purpose of Subrogation is to?

• A. Hold negligent third parties at fault
• B. Increase insured’s premiums
• C. Expand coverage beyond loss
• D. Delay claims processing

Answer: (A)

Subrogation is the insurer’s right to step into the insured’s shoes after paying a claim and go after the person or party responsible for the loss. The main purpose is to hold negligent third parties at fault by enabling the insurer to recover the amount paid on the claim from the party that caused the damage. This ensures the responsible party bears the cost, rather than the insured bearing it twice—once when the claim is paid, and again if recovery were possible through the insured’s own action. It also helps keep insurance costs down for everyone by reducing net losses to the insurer. Subrogation doesn’t expand coverage, delay processing, or purposefully raise premiums.

Subrogation is the insurer’s right to step into the insured’s shoes after paying a claim and go after the person or party responsible for the loss. The main purpose is to hold negligent third parties at fault by enabling the insurer to recover the amount paid on the claim from the party that caused the damage. This ensures the responsible party bears the cost, rather than the insured bearing it twice—once when the claim is paid, and again if recovery were possible through the insured’s own action. It also helps keep insurance costs down for everyone by reducing net losses to the insurer. Subrogation doesn’t expand coverage, delay processing, or purposefully raise premiums.