What is the definition of subrogation in insurance claims?

Subrogation in insurance claims refers specifically to the process by which an insurer who has paid a claim on behalf of a policyholder seeks to recover that amount from a third party responsible for the loss. This legal principle allows insurance companies to step into the shoes of the insured and pursue compensation from parties whose negligence or actions led to the claim.

This process not only helps the insurer recoup costs but also serves to hold the responsible party accountable, promoting fairness in the overall insurance system. By employing subrogation, insurers can help keep premium costs more manageable for all policyholders, as they mitigate their losses through these recoveries.

The other options describe concepts not directly related to the definition of subrogation. For instance, claiming damages for personal injuries pertains to how individuals might seek compensation for their injuries, while fraud detection involves identifying false claims. Adjustments to insurance policies typically occur after a claim is filed but do not relate to the recovery process that subrogation represents.