Subrogation Recovery Process Flashcards
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Read the first 7 Subrogation Recovery Process flashcards as text
Which doctrine bars subrogation recovery when the insured has not been made whole by the insurance payment?
Answer: Made Whole Doctrine
The Made Whole Doctrine prevents an insurer from pursuing subrogation until the insured has been fully compensated for all losses, including uninsured portions.
When two insurers cover the same loss and one pays, what legal right allows the paying insurer to seek contribution from the other?
Answer: Equitable Contribution
Equitable contribution allows an insurer who paid more than its proportionate share to recover the excess from co-insurers covering the same risk.
A subrogation claim is filed three years after the loss date, but the applicable statute of limitations is two years. What is the most likely outcome?
Answer: The claim is time-barred
A claim filed after the statute of limitations has expired is time-barred, and the defendant can assert this as a complete defense.
Which method of calculating the statute of limitations for subrogation begins running from the date of the insurer's payment to the insured?
Answer: Payment Rule
Under the Payment Rule, some jurisdictions start the limitations clock from when the insurer paid the insured, not from the date of the underlying loss.
An insured signs a lease clause releasing the landlord from liability before the loss. How does this typically affect the insurer's subrogation rights?
Answer: The insurer loses subrogation rights against the landlord
Pre-loss contractual waivers of subrogation signed by the insured generally extinguish the insurer's right to subrogate against that party.
In a products liability subrogation case, which theory allows recovery without proving the manufacturer was negligent?
Answer: Strict Liability
Strict liability holds a product manufacturer liable for defective products that cause harm regardless of whether they exercised reasonable care.
What is the primary purpose of a reservation of subrogation rights letter sent to the insured during claims handling?
Answer: To formally preserve the insurer's right to recover after payment
A reservation of subrogation rights letter puts the insured on notice that the insurer intends to pursue recovery and asks for cooperation.