Subrogation Recovery Process Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Subrogation Recovery Process flashcards as text
Which element is NOT required to establish a valid subrogation right?
Answer: The insured must have caused the loss
Subrogation requires that the insurer paid a covered loss and that a third party bears legal responsibility; the insured's own fault would typically negate the third-party liability element.
What is the role of a 'subrogation trust agreement' in a workers' compensation third-party case?
Answer: It allows the employee to pursue the third party on behalf of the insurer and holds recovery in trust
A subrogation trust agreement authorizes the employee to pursue the third-party action while agreeing to hold recovered funds in trust for proportional distribution to the carrier.
When a tortfeasor is underinsured, which coverage on the insured's own auto policy may provide additional recovery that the insurer can subrogate against?
Answer: Underinsured Motorist (UIM) Coverage
Underinsured Motorist coverage fills the gap when the tortfeasor's liability limits are insufficient, and the insurer may have subrogation rights against the UIM proceeds depending on the jurisdiction.
A contractor's negligence during construction causes water damage to a homeowner's property. The homeowner's insurer pays the claim. Against whom does the insurer subrogate?
Answer: The negligent contractor
The insurer subrogates against the negligent contractor who caused the loss, stepping into the homeowner's shoes to pursue the responsible party.
What is 'equitable subrogation' as distinguished from 'legal subrogation'?
Answer: Rights arising by operation of law from an insurance payment, without a specific policy provision
Equitable subrogation arises automatically by operation of law when an insurer pays a loss, regardless of whether the policy contains an express subrogation clause.
In a healthcare subrogation case, which federal law may preempt state anti-subrogation statutes for employer-sponsored ERISA health plans?
Answer: Employee Retirement Income Security Act (ERISA)
ERISA preempts state laws that relate to employee benefit plans, allowing self-funded ERISA plans to enforce subrogation and reimbursement clauses even in states that restrict such rights.
What does 'pro tanto' mean in the context of subrogation settlement allocations?
Answer: To the extent of the payment made
Pro tanto means the insurer is subrogated only to the extent of the payment it made, not exceeding what it actually paid out on the claim.