What is the term for the right of an insurer to pursue a responsible third party for recovery?

Subrogation is the process that allows an insurer to take on the rights of the insured to seek recovery from a third party that may be responsible for a loss. When an insurance company pays out a claim to its policyholder, it may then pursue the responsible party to recover the amount paid. This helps the insurer to mitigate its losses and is a standard practice in the insurance industry.

Understanding subrogation is key, as it ensures that the costs of claims do not unfairly burden the insurer and helps in maintaining reasonable insurance premium rates for all policyholders. The concept applies to various types of insurance, including health, auto, and property, reinforcing the idea that insurers have a recourse against those who are liable for damages or losses. The other terms do not encapsulate this specific right of the insurer to recover costs from a third party.