What is the insurer's right in Subrogation?

• A. Defend the insured in court
• B. Recover from negligent third party after paying a claim
• C. Cancel the policy for fraud
• D. Waive the insured's liability

Answer: (B)

Subrogation lets the insurer recover the amount it paid to the insured by pursuing the negligent third party who caused the loss. After the insurer pays a claim, it stands in the insured’s shoes and can sue the responsible party to recover those costs. This keeps the at-fault party ultimately bearing the cost, prevents the insured from collecting twice, and helps keep premiums fair for everyone.

The other ideas don’t fit subrogation: subrogation isn’t about defending the insured in court, it’s about the insurer recovering from the third party; it isn’t about canceling the policy for fraud; and it isn’t about waiving the insured’s liability.