Subrogation

When an insurer pays a policyholder's claim, it can step into the policyholder's shoes and pursue whoever was at fault for the same amount. That substitution of one party for another in a legal claim is subrogation. It keeps costs with the responsible party instead of the insurer, and, indirectly, other policyholders.

A simple example: your insurer pays to repair your car after another driver rear-ends you. Your insurer can then recover that payout from the at-fault driver's insurer. You've been made whole; the cost lands where it belongs.