Personal Auto PolicyQuestion 424 of 474
The insurer pays a $6,000 collision claim and then pursues the at-fault driver for that money. This right is called:
a.Salvage, the insurer's right to sell the damaged car
b.Subrogation, the insurer's right to recover payment
c.Appraisal, a method of settling a value dispute
d.Abandonment, the insured's right to hand over the car
Explanation
Under the general provisions the insurer that pays a loss steps into the insured's place against the party responsible, and the insured must sign papers and do nothing to impair that right. Salvage is the insurer taking the damaged property it paid for, not a claim against the wrongdoer. Appraisal settles a disagreement over the amount of a loss, and property cannot simply be abandoned to the insurer.
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