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.