Los Angeles Claims Adjuster Property and Casualty Exam 2025 – 400 Free Practice Questions to Pass the Exam

The pursuit of recovering damages from a third party is a fundamental aspect of the concept of subrogation in insurance. When an insurer makes a payment to settle a claim on behalf of the insured, subrogation allows the insurer to step into the shoes of the insured and pursue recovery from any party that may be responsible for the loss. This process helps the insurer recoup some or all of the costs incurred due to the claim, effectively spreading the financial responsibility to the party at fault.

This recovery process is essential for maintaining the insurer's financial stability and ensures that the costs associated with claims do not have to be absorbed solely by the insurer. It also reinforces the principle that the insured should not profit from a loss; instead, they should only recover the amount of their loss.

The other responses do not align with the primary goal of subrogation. Waiving the deductible would imply that the insured has a more favorable outcome than intended, while transferring rights to the insured does not reflect the insurer's operational procedure post-payment. Settling outside of court may be a strategy employed in some cases, but it is not the primary objective pursued under subrogation after a loss is paid. Thus, seeking to recover damages from a third party best exemplifies the