Brown insured his automobile against theft under a policy of insurance.Shortly after he had insured the vehicle,he found himself short of cash,and offered to sell the vehicle to his friend for $500 if his friend would dismantle it for parts.Brown did not tell his friend that he intended to claim that the car had been stolen.His friend bought the car for $500,and dismantled it.
-If the insurer,unaware of the fraud,paid Brown for the claimed loss of his automobile,the insurer is entitled to a transfer of the title to the vehicle.

Question

Quizplus · Accepted Answer

Since Brown committed fraud by selling the car to his friend and then claiming it was stolen, the insurer is entitled to the title of the vehicle since they paid for the claimed loss. This is known as subrogation, where the insurer is substituted for the insured and can take legal action to recover their losses.

Brown Insured His Automobile Against Theft Under a Policy of Insurance.Shortly