Florida Insurance Claims Adjuster License Practice Exam

What is it called when the insured transfers rights to collect damages to the insurer?

1. Assignment

2. Subrogation

3. Indemnification

4. Transfer

The correct answer is: Subrogation

When an insured experiences a loss or damage, they have the legal right to be compensated by their insurer for that loss. For certain kinds of damages, such as in a car accident, the insurer has the right to try and recoup the cost from the responsible party. This process is known as subrogation. Assignment, choice A, involves the transfer of rights to a third party, not necessarily an insurer. Indemnification, choice C, refers to the process of being reimbursed for losses or expenses. Transfer, choice D, is a broad term that could potentially encompass both assignment and subrogation, but it is not specific to the insurance industry. Overall, none of the other options fully describe the specific situation of an insured transferring rights to collect damages to their insurer.