What principle allows an insurer to recover payments for medical expenses from a third party?

The principle that allows an insurer to recover payments for medical expenses from a third party is subrogation. This principle comes into play when an insurance company pays a claim to its policyholder for a loss that is actually the fault of another party. After compensating the insured, the insurer has the right to "step into the shoes" of the policyholder and pursue recovery of the funds from the third party responsible for the loss.

Subrogation is essential because it helps prevent the insured from receiving a double recovery—getting paid by both the insurer and the responsible party—and it allows insurance companies to recoup their costs, thereby keeping premiums stable. The process illustrates the insurer's interest in regaining the funds expended on the claim through legal action against the responsible third party.

The other options—contribution, reinstatement, and tort—do not directly pertain to the right of recovery for payments made by an insurer. Contribution refers to the situation where multiple insurers share a claim liability, reinstatement deals with the reinstatement of coverage after a policy has been canceled, and tort relates to wrongful acts that lead to legal liability, rather than the recovery of funds by an insurer from a third party.