After paying a claim, the insurer's right to pursue recovery from the responsible party is known as?

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Prepare for the Florida Claims Adjuster (6-20) Test. Use flashcards and multiple choice questions, with hints and explanations for each question. Ace your exam!

Multiple Choice

After paying a claim, the insurer's right to pursue recovery from the responsible party is known as?

Explanation:
Subrogation is the insurer’s right to pursue recovery from the party responsible for the loss after the claim has been paid. Once the insurer indemnifies the insured, it steps into the insured’s position and can sue the at-fault party (or that party’s insurer) to reclaim the amount paid. This mechanism prevents the insured from double recovery and ensures the loss is ultimately borne by the responsible party. It’s different from appraisal (which resolves disputes about the claim amount), binder (a temporary coverage agreement), and insurance (the contract of coverage itself).

Subrogation is the insurer’s right to pursue recovery from the party responsible for the loss after the claim has been paid. Once the insurer indemnifies the insured, it steps into the insured’s position and can sue the at-fault party (or that party’s insurer) to reclaim the amount paid. This mechanism prevents the insured from double recovery and ensures the loss is ultimately borne by the responsible party. It’s different from appraisal (which resolves disputes about the claim amount), binder (a temporary coverage agreement), and insurance (the contract of coverage itself).

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