The ________ clause in an insurance policy says that when the insurer indemnifies the insured for a loss, it takes over the insured's right to collect payment from any negligent third party that may have caused the loss.
A) indemnity
B) proof of loss
C) adhesion
D) subrogation

Question

Quizplus · Accepted Answer

The clause described in the question is known as the subrogation clause. This clause allows the insurer to pursue legal action against any third party that may have caused the loss and recover the amount paid out to the insured. As a result, the insurer is able to reduce their own losses and prevent the insured from double recovery (i.e. receiving payment from both the insurer and the third party).

The ________ Clause in an Insurance Policy Says That When