What is the term for transferring the right of legal action against a responsible third party to an insurance company?

Subrogation refers to the process by which an insurance company assumes the right to pursue a legal claim against a third party that is responsible for an insured loss. This typically occurs after the insurance company has compensated the policyholder for their loss. By exercising subrogation rights, the insurer seeks to recover the amount it paid to the insured by holding the third party liable. This process not only helps to ensure the insurance company can recoup its losses but also helps prevent the policyholder from receiving a double recovery for the same loss, maintaining the principle of indemnity within insurance coverage.

In contrast, the other terms have different meanings in the insurance context. Assignment involves the transfer of rights or benefits under an insurance policy, but it does not specifically involve pursuing action against responsible third parties. Indemnification refers to compensating for loss or damage, typically the role of the insurance company to its insured, while a waiver is the relinquishment of a known right or privilege, which doesn't pertain to the transfer of legal action rights against an at-fault party.