Which of the following statements about subrogation is true?

Question

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Subrogation is the process by which an insurer can step into the shoes of its insured and seek recovery from a third party that caused a loss or contributed to it. The insured's right to collect benefits may be forfeited if the insured interferes with the insurer's subrogation rights after a loss occurs. This means that the insured cannot take any action that might prejudice the insurer's subrogation rights, such as settling with the third party or releasing them from liability, without the insurer's permission. Option A is incorrect because subrogation can be used for losses covered under any type of insurance policy, not just life insurance. Option B is incorrect because subrogation does not allow the insurer to sue its own insured who is negligent; it allows the insurer to sue a third party who caused the loss. Option D is incorrect because the insurer is not required to exercise its subrogation rights if it decides that it is not cost-effective or there are other reasons not to pursue recovery.

Which of the Following Statements About Subrogation Is True