CAIA Subrogation and Salvage 3

Question 1

Which document transfers ownership of a totaled vehicle from the insured to the insurer so it can be sold as salvage?

Accepted Answer

Certificate of title endorsed over to the insurer

Answer

The insured must sign over the certificate of title to the insurer, transferring ownership before the vehicle can be sold as salvage.

Question 2

In a subrogation claim, the term 'made whole doctrine' means:

Accepted Answer

The insured must be fully compensated for their loss before the insurer can recover from the third party

Answer

Under the made whole doctrine, the insurer cannot recover its subrogation interest until the insured has been fully indemnified for all losses.

Question 3

What is the primary purpose of requiring a salvage inspection before issuing a rebuilt title?

Accepted Answer

To confirm the vehicle was repaired to safe operating condition

Answer

A salvage inspection verifies that a previously totaled vehicle has been properly repaired and is safe to return to the road.

Question 4

An insurer pays a $12,000 collision claim. It later recovers $9,000 through subrogation. If the insured paid a $500 deductible, how much of the $9,000 recovery should typically be returned to the insured?

Accepted Answer

$500 — the deductible amount

Answer

When the insurer recovers through subrogation, the insured's deductible portion is typically reimbursed first from the recovery.

Question 5

Which type of subrogation arises from policy language rather than common law principles?

Accepted Answer

Conventional subrogation

Answer

Conventional subrogation is created by contract (policy language), while equitable subrogation arises automatically under common law.

(CAIA) Certified Automotive Insurance Adjuster Practice Test

(CAIA) Certified Automotive Insurance Adjuster Practice Test

CAIA Subrogation and Salvage 3