What is subrogation in the context of medical expense insurance?

• A. Subrogation allows the insurer to recover from a third party responsible for the loss.
• B. Subrogation increases premium for the insured.
• C. Subrogation is only used in disability insurance.
• D. Subrogation prevents any payment by the insurer.

Answer: (A)

Subrogation is the insurer’s right to step into the insured’s shoes and seek reimbursement from the party responsible for the loss after the insurer has paid the claim. In medical expense insurance, once benefits are paid to or on behalf of the insured, the insurer can pursue recovery from the third party who caused the injury or from that party’s liability coverage. This mechanism prevents the insured from bearing the cost twice and helps keep overall insurance costs down.

This isn’t about increasing the insured’s premiums, isn’t limited to disability insurance, and doesn’t mean the insurer won’t pay claims. Instead, it enables the insurer to recoup part of the claim from the at-fault party when someone else is liable.