If a claim is settled by an insurer and the loss is due to the negligence of another party, what options does the insurer have?

When a claim is settled by an insurer and the loss is due to the negligence of another party, the insurer has the right to seek recovery from the third party responsible for the loss. This process is known as subrogation, where the insurer steps into the shoes of the insured to pursue the negligent party for recovery of the amount paid out in the claim.

By seeking recovery from the third party, the insurer aims to recoup the costs incurred in settling the claim. This aligns with the principle of indemnity in insurance, which ensures that the insured is restored to their financial position prior to the loss, without the insurer suffering a loss themselves due to a settlement that was necessitated by another's negligence.

The act of following up with the responsible third party is a standard procedure in insurance practices, enabling insurers to manage their losses effectively and keep insurance premiums lower by recovering funds when possible.