The transfer of an insured's legal right of recovery against others to an insurance company is called?

The transfer of an insured's legal right of recovery against others to an insurance company is known as subrogation. This process occurs after the insurance company pays for a loss that the insured has suffered. By exercising the right of subrogation, the insurer can pursue recovery of the payment from third parties who may be responsible for the loss.

Subrogation is an important mechanism that prevents the insured from receiving a financial windfall, as they cannot collect compensation from both the insurer and the party at fault. It ensures that the cost of claims is ultimately borne by the party responsible for the damage, thereby reducing the overall costs for the insurance company and keeping premiums lower for policyholders.

This process is fundamental to the operation of property and casualty insurance, allowing insurers to maintain financial viability while providing coverage.