What does "subrogation" refer to in an auto insurance claim?

Subrogation is a key concept in the realm of auto insurance claims that refers to the right of insurance companies to step into the shoes of the insured after they have paid a claim. This allows the insurer to pursue recovery from a third party that is responsible for the loss. For instance, if a policyholder is involved in an accident where another driver is at fault, the insurance company may pay for the policyholder's damages and subsequently seek reimbursement from the at-fault driver's insurance. This process helps insurers recover their costs and discourages negligent behavior by holding responsible parties accountable.

The other options touch on different aspects of the insurance process but do not accurately describe subrogation. The filing of a claim involves notifying the insurer about an incident, calculating premiums pertains to how insurance costs are determined, and the responsibility to mitigate losses speaks to the insured’s duty to minimize further damage after an incident. None of these options capture the essence of what subrogation entails, which is the insurer's right to seek recompense from a third party after covering a loss for their insured.