After a water loss, an insured signs a release of the plumbing contractor that caused it, then files the claim. The insurer may:
Explanation
Subrogation lets the insurer step into the insured's place and pursue the party at fault, and policy conditions require the insured to do nothing after a loss that impairs that right. A release given to the responsible contractor destroys the right, so the insurer can reduce or deny the claim to that extent. Suing the contractor anyway is not open to the insurer, because it can have no better claim than the insured it stands in for.
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