Which of the following statements about subrogation is false?

Subrogation is a fundamental principle in insurance that allows insurers to recover costs from a third party that caused a loss to the insured. When an insurer pays a claim to the insured, it gains the right to pursue any legal action against the responsible party to recover that amount. This process prevents the insured from being compensated twice for the same loss, thereby protecting the integrity of the insurance system.

When it comes to the assertion that subrogation allows the insurer to file suit against the insured, this statement does not align with the principles of subrogation. In fact, subrogation is meant to ensure that the insured is compensated by the insurer, while the insurer then seeks repayment from the party at fault. Filing suit against the insured would contradict the intention of subrogation, as it would not be in the best interests of the insurer to pursue their own policyholder under circumstances where they have already fulfilled their obligation to cover the loss.

The other statements accurately reflect the concept of subrogation. Preventing the insured from collecting twice for the same loss is a key reason for its existence. Additionally, allowing the insurer to control expenses and premiums is a byproduct of being able to recoup losses from third parties, which leads to more favorable cost