The right of ____ gives the insurer the right to recover its costs from the at-fault party after the company has paid a claim to its insured.

Question

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Subrogation is the right of the insurer to pursue legal action against the at-fault party or their insurer to recover the costs of a claim that was paid to the insured. This allows the insurer to avoid paying for losses that were caused by someone else and hold the responsible party accountable. Indemnity refers to the principle of compensating the insured for their losses, insurance interest refers to the insurable interest that the policyholder has in the insured property or person, and coinsurance refers to the sharing of risk between the insured and insurer. None of these options accurately describe the right to recover costs from a third party, which is specifically known as subrogation.

The Right of ____ Gives the Insurer the Right to Recover