What does "subrogation" entail in the context of auto insurance claims?

Subrogation in the context of auto insurance claims refers to the process by which an insurance company seeks reimbursement from the at-fault party after it has paid a claim to its policyholder. When an insurer pays a claim, it may pursue recovery of those costs from the individual who is responsible for the accident or event that led to the claim. This process serves to ensure that the insurance company can recoup some of its losses, and it allows the policyholder to get compensated without having to wait on the at-fault party's liability.

Subrogation helps maintain the principle that the policyholder should not benefit from a claim, meaning they should not receive more than what they lost due to the accident. It also reinforces accountability, as it holds the party at fault financially responsible for the damages they caused.

The other choices refer to different aspects of the insurance process, such as immediate reimbursements, claim negotiations, or adjustments in premiums, which do not accurately describe the subrogation process and its role in the claims system.