CAIA Subrogation and Salvage 5

Question 1

Which legal doctrine holds that a subrogated insurer 'stands in the shoes' of the insured when pursuing recovery from a third party?

Accepted Answer

Equitable subrogation

Answer

Under equitable subrogation, the insurer assumes the same legal rights and position as the insured to recover from the responsible party.

Question 2

An insurer discovers that the salvage vehicle it sold at auction was actually repaired and resold without disclosure of its salvage title status. This is an example of:

Accepted Answer

Salvage title washing

Answer

Salvage title washing occurs when a salvage-titled vehicle is re-registered in a state with less stringent disclosure laws to obscure its salvage history.

Question 3

In a multi-vehicle accident where both drivers share fault, how does comparative negligence affect the insurer's subrogation recovery?

Accepted Answer

Recovery is reduced proportionally to the insured's percentage of fault

Answer

In comparative negligence states, the insurer's subrogation recovery is reduced by the percentage of fault attributed to the insured.

Question 4

What is the role of a 'salvage pool' or 'salvage auction' in the total loss process?

Accepted Answer

To provide a marketplace where damaged vehicles are sold to dismantlers, rebuilders, and dealers

Answer

Salvage pools/auctions are platforms where insurers sell totaled vehicles to buyers such as auto dismantlers, rebuilders, and used parts dealers.

Question 5

When an insurer pays a first-party comprehensive claim for a stolen vehicle that is later recovered, what typically happens next?

Accepted Answer

The insurer evaluates repair costs and determines whether to retain or return the vehicle to the insured

Answer

Upon recovery, the insurer evaluates repair cost versus salvage value; if repairs are feasible, the insurer may offer to return the vehicle with the insured reimbursing the claim payment.

(CAIA) Certified Automotive Insurance Adjuster Practice Test

(CAIA) Certified Automotive Insurance Adjuster Practice Test

CAIA Subrogation and Salvage 5