Insurance · General

What is 'subrogation' in insurance?

Correct answer

The insured transfers their right to recover from a third party to the insurer after the insurer pays the claim

  1. A The insured transfers their right to recover from a third party to the insurer after the insurer pays the claim
  2. B A discount for long-term policyholders
  3. C A provision allowing payment in installments
  4. D A reduction in the insured's premium for no claims

Why this is the answer

Subrogation: after paying a covered claim, the insurer 'steps into the shoes' of the insured to recover from the responsible third party. This prevents the insured from collecting twice (from insurer AND the at-fault party). The insured must cooperate with subrogation proceedings.
Source: Adjuster Exam, Subrogation

Practice more questions

This question is from our Insurance License Practice Tests practice test. Take the full practice test to test your knowledge across all General and other topics.

Take the Insurance Adjuster practice test →

New to this exam? Our Insurance exam guide explains the format, scoring, and how to prepare.

Related questions

State-specific guides

Need information for your state? Our state guides cover local requirements, fees, and what to expect on exam day.