What is a primary role of the 'Subrogation' process?

The primary role of the subrogation process is to recover costs from a third party after a claim has been paid by the insurance company. When an insurance company covers a claim for a policyholder, it may determine that another party is responsible for the loss incurred. Subrogation allows the insurance company to pursue that third party to recover the money it spent on the claim. This process helps to hold the responsible party accountable for their actions while also reducing costs for the insurance company, which can contribute to maintaining stable premiums for policyholders.

By engaging in subrogation, the insurer can recoup the payout made to the insured, which ultimately helps to keep overall insurance costs down. This is an important mechanism in insurance that ensures that the financial burden does not fall entirely on the insurer or the insured when a third party is at fault.