What is subrogation in Texas property and casualty insurance?

• A. The insured's right to sue the third party directly for damages.
• B. The insurer's right to pursue recovery from a third party after paying a claim.
• C. A method of calculating premiums.
• D. A type of deductible.

Answer: (B)

Subrogation is when the insurer, after paying the insured’s claim, steps into the insured’s shoes and seeks recovery from the party at fault. In Texas property and casualty insurance, once the claim is paid, the insurer has the right to pursue the third party to recover the amount paid to the insured (and related claim costs). This prevents the insured from getting paid twice and helps keep premiums fair by ensuring the responsible party ultimately bears the loss. The insured’s rights against the third party are typically assigned to the insurer for this recovery.

The other ideas don’t fit because subrogation is not the insured’s direct right to sue the third party (that would be the insured’s own action against the at-fault party), it’s not a method for calculating premiums, and it isn’t a deductible.