After paying a claim, what right does an insurance company have against the negligent party?

The correct answer is subrogation, which refers to the insurance company's legal right to pursue a third party that caused an insurance loss to the insured. When an insurance company pays for damages resulting from a negligent party's actions, it can seek reimbursement from that party or their insurance to recover the costs it has incurred. This process ensures that the insurance company does not have to bear the financial burden of the claim and can hold the responsible party accountable for their negligence.

In the context of insurance, subrogation helps to maintain the fundamental principle that the insured should not profit from a loss, but rather should be made whole again by recovering costs associated with the claim from the party at fault. This mechanism not only protects the insurer's interests but also reinforces accountability within the system by ensuring that negligent parties are held liable for their actions.