CA CA Subrogation & Recovery Procedures 2

Question 1

In a California auto claim where the insured is partially at fault, which rule affects the amount of subrogation recovery?

Accepted Answer

Pure comparative fault (reduces recovery proportionately)

Answer

California follows pure comparative fault, meaning the insurer can recover a proportionate share of its subrogation interest even if the insured was partially at fault.

Question 2

What is 'intercompany arbitration' used for in the California claims context?

Accepted Answer

Efficiently resolving subrogation and contribution disputes between two insurance companies

Answer

Intercompany arbitration, often administered through Arbitration Forums Inc., provides a faster and less expensive forum for insurers to resolve subrogation disputes between each other.

Question 3

A California adjuster pays a homeowner's fire claim caused by a defective appliance. What type of subrogation applies?

Accepted Answer

Products liability subrogation against the appliance manufacturer

Answer

When a defective product causes a covered loss, the insurer can pursue products liability subrogation against the manufacturer or distributor of the defective item.

Question 4

Which document formally transfers the insured's right to sue the third party to the insurer as part of the subrogation process?

Accepted Answer

Assignment of claim or subrogation receipt

Answer

A subrogation receipt or assignment of claim is signed by the insured, formally transferring their legal rights against the responsible party to the insurer.

Question 5

What does 'pro rata' recovery mean in a subrogation context with multiple insurers?

Accepted Answer

Each insurer recovers in proportion to the amount it paid toward the total loss

Answer

In a pro rata recovery, each contributing insurer receives a share of the subrogation proceeds proportional to the share of the total loss it paid.

(CA) Certified Adjuster Designation Practice Test

(CA) Certified Adjuster Designation Practice Test

CA CA Subrogation & Recovery Procedures 2