CALA CALA Subrogation and Recovery in Auto Claims

Question 1

What is subrogation in the context of auto insurance claims?

Accepted Answer

The insurer's right to recover paid claim costs from a liable third party

Answer

Subrogation allows an insurer that has paid a claim to step into the insured's shoes and seek reimbursement from the at-fault party or their insurer.

Question 2

Which document must an insured typically sign to allow the insurer to pursue subrogation?

Accepted Answer

Subrogation receipt or loan receipt agreement

Answer

A subrogation receipt or loan receipt agreement transfers the insured's recovery rights to the insurer so it can pursue the at-fault party.

Question 3

What is the 'made whole' doctrine in subrogation?

Accepted Answer

The insured must be fully compensated before the insurer can recover its subrogation interest

Answer

The made whole doctrine holds that the insurer cannot recover subrogation funds until the insured has been fully compensated for all losses, including uninsured amounts.

Question 4

When does an insurer's subrogation right typically arise?

Accepted Answer

After the insurer has paid the insured's claim

Answer

Subrogation rights arise once the insurer has paid the insured's claim, giving the insurer the legal right to pursue recovery from responsible third parties.

Question 5

In a comparative negligence state, how does the at-fault party's percentage of fault affect subrogation recovery?

Accepted Answer

Recovery is limited to the at-fault party's percentage of fault

Answer

In comparative negligence states, the insurer's subrogation recovery is proportionally reduced to match the at-fault party's degree of responsibility.

(CALA) Certified Automotive Loss Adjuster Practice Test

(CALA) Certified Automotive Loss Adjuster Practice Test

CALA CALA Subrogation and Recovery in Auto Claims