General Insurance PrinciplesQuestion 196 of 315
Subrogation is BEST defined as:
a.The transfer of the policy to a new owner
b.The right of the insured to take a loan against the policy
c.The substitution of a new beneficiary
d.The right of the insurer that has paid a claim to recover from a third party legally responsible for the loss
Explanation
Subrogation lets an insurer that has paid a claim step into the insured's shoes and recover from any third party legally responsible for the loss. It prevents the insured from collecting twice and shifts the cost to the actual wrongdoer.
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