Which of the following defines a legal right related to subrogation?

Subrogation is a legal principle that allows an insurance company to take on the rights of the insured after it has paid a claim. The correct answer identifies subrogation as the right of the party who paid a claim to recover from the original debtor. Once the insurer compensates the insured for a loss, it can pursue a recovery from third parties responsible for that loss. This process serves to ensure that the financial burden of the claim falls on the party at fault instead of the insurer.

This mechanism not only helps insurers mitigate their losses but also prevents the insured from receiving a double recovery for the same loss. By exercising subrogation rights, the insurer can recoup the funds it has paid out, ultimately reducing costs and keeping premiums manageable for all policyholders.

Other options presented do not accurately define subrogation: representing the insured in legal proceedings pertains to different aspects of the insurer's responsibilities; altering terms after a claim involves policy amendments rather than subrogation; and refusing claims based on policy exclusions relates to underwriting conditions and does not encompass the recovery aspect inherent in subrogation.