Subrogation is defined as:

Subrogation is defined as:

• A. The transfer of rights from the insured to the insurer
• B. The substitution of the insured for the insurer
• C. The substitution of the insurer for the insured
• D. The cancellation of the policy

Answer: (C)

Subrogation means the insurer, after paying a claim, steps into the insured’s position to pursue recovery from the party that caused the loss. In practical terms, once the insurer indemnifies the insured, it owns the right to seek damages from the at-fault party, effectively substituting the insurer for the insured in that claim. This mechanism prevents the insured from collecting twice and helps hold the responsible party financially accountable, which in turn supports fair premiums and overall loss costs. The other ideas don’t fit because subrogation isn’t about the insured giving up all rights permanently to the insurer, nor about the insured replacing the insurer, and it has nothing to do with canceling a policy.

Subrogation means the insurer, after paying a claim, steps into the insured’s position to pursue recovery from the party that caused the loss. In practical terms, once the insurer indemnifies the insured, it owns the right to seek damages from the at-fault party, effectively substituting the insurer for the insured in that claim. This mechanism prevents the insured from collecting twice and helps hold the responsible party financially accountable, which in turn supports fair premiums and overall loss costs.

The other ideas don’t fit because subrogation isn’t about the insured giving up all rights permanently to the insurer, nor about the insured replacing the insurer, and it has nothing to do with canceling a policy.