Describe "subrogation" in insurance terms.

Subrogation in insurance is a principle that allows an insurer to step into the shoes of the insured after the insurer has paid out a claim. This means that once the insurance company compensates the policyholder for a loss, it has the right to seek recovery of those costs from any third party that may have been responsible for causing that loss. This process helps to prevent the insured from receiving double compensation for the same loss and ensures that the burden of paying for damages ultimately falls on the party at fault.

For instance, if a driver is involved in an accident caused by another party and their insurance pays for the damages, the insurer can then pursue a claim against the at-fault driver or their insurance company to recover the money they paid. This right to pursue recovery is essential for maintaining fair pricing for insurance and preventing unjust enrichment.