CALA CALA Subrogation and Recovery in Auto Claims 2

Question 1

What is a waiver of subrogation endorsement?

Accepted Answer

An endorsement that prohibits the insurer from pursuing recovery against a named party

Answer

A waiver of subrogation endorsement prevents the insurer from pursuing recovery against a specified party, often required in commercial contracts.

Question 2

What happens to subrogation rights if the insured settles directly with the at-fault party without notifying the insurer?

Accepted Answer

The insured may have breached the policy, potentially releasing the insurer from the claim obligation

Answer

If an insured settles with the at-fault party without protecting the insurer's subrogation interest, it may breach the cooperation clause and jeopardize the insurer's coverage obligation.

Question 3

What is the statute of limitations consideration for subrogation claims?

Accepted Answer

The insurer must file within the same period applicable to the insured's original tort claim

Answer

Because the insurer stands in the insured's shoes, the applicable statute of limitations for the underlying tort claim governs how long the insurer has to pursue subrogation.

Question 4

In auto subrogation, what does 'first-party recovery' refer to?

Accepted Answer

Recovery from the insured's own insurer under collision or comprehensive coverage

Answer

First-party recovery refers to a claim made by the insured against their own insurer, such as under collision coverage, which then triggers the insurer's subrogation rights.

Question 5

What role does a demand letter play in the subrogation recovery process?

Accepted Answer

It formally notifies the at-fault party or their insurer of the subrogation claim and the amount sought

Answer

A subrogation demand letter formally asserts the insurer's right to reimbursement and specifies the amount paid, initiating the recovery negotiation process.

(CALA) Certified Automotive Loss Adjuster Practice Test

(CALA) Certified Automotive Loss Adjuster Practice Test

CALA CALA Subrogation and Recovery in Auto Claims 2