Subrogation is defined as what?

Subrogation is defined as what?

• A. The substitution of one person or group by another in respect of a debt or insurance claim
• B. A lien on property
• C. The assignment of policy benefits
• D. The cancellation of an insurance policy

Answer: (A)

Subrogation means the insurer steps into the insured’s shoes to recover the amount paid from the party responsible for the loss. After paying a claim, the insurer has the right to pursue the liable person or their insurer to recoup costs, so the insured isn’t paid twice and the responsible party ultimately bears the loss. This isn’t a lien on property, not an assignment of policy benefits to someone else, and not the cancellation of a policy, which is why the other options don’t fit.

Subrogation means the insurer steps into the insured’s shoes to recover the amount paid from the party responsible for the loss. After paying a claim, the insurer has the right to pursue the liable person or their insurer to recoup costs, so the insured isn’t paid twice and the responsible party ultimately bears the loss.

This isn’t a lien on property, not an assignment of policy benefits to someone else, and not the cancellation of a policy, which is why the other options don’t fit.