Florida Insurance Claims Adjuster License Practice Exam

What is subrogation?

1. The process of transferring insurance coverage from one party to another

2. The act of an insurer assuming the rights of an insured to claim damages

3. A legal procedure for settling disputes

4. The termination of an insurance policy before its expiry

The correct answer is: The act of an insurer assuming the rights of an insured to claim damages

Subrogation is the act of an insurer assuming the rights of an insured to claim damages. It is not the process of transferring insurance coverage from one party to another (A), as coverage cannot be transferred between parties. It is also not a legal procedure for settling disputes (C), as subrogation is a specific action taken by an insurer. Lastly, it is not the termination of an insurance policy before its expiry (D), as that would be cancellation, not subrogation. This is why option B is the correct answer.