CA Subrogation & Recovery Procedures Flashcards
6 cards from real CA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CA Subrogation & Recovery Procedures flashcards as text
In a California auto claim where the insured is partially at fault, which rule affects the amount of subrogation recovery?
Answer: Pure comparative fault (reduces recovery proportionately)
California follows pure comparative fault, meaning the insurer can recover a proportionate share of its subrogation interest even if the insured was partially at fault.
What is 'intercompany arbitration' used for in the California claims context?
Answer: Efficiently resolving subrogation and contribution disputes between two insurance companies
Intercompany arbitration, often administered through Arbitration Forums Inc., provides a faster and less expensive forum for insurers to resolve subrogation disputes between each other.
A California adjuster pays a homeowner's fire claim caused by a defective appliance. What type of subrogation applies?
Answer: Products liability subrogation against the appliance manufacturer
When a defective product causes a covered loss, the insurer can pursue products liability subrogation against the manufacturer or distributor of the defective item.
Which document formally transfers the insured's right to sue the third party to the insurer as part of the subrogation process?
Answer: Assignment of claim or subrogation receipt
A subrogation receipt or assignment of claim is signed by the insured, formally transferring their legal rights against the responsible party to the insurer.
What does 'pro rata' recovery mean in a subrogation context with multiple insurers?
Answer: Each insurer recovers in proportion to the amount it paid toward the total loss
In a pro rata recovery, each contributing insurer receives a share of the subrogation proceeds proportional to the share of the total loss it paid.
When should a California adjuster first identify potential subrogation during the claims process?
Answer: During the initial investigation, as soon as a third-party cause is suspected
Subrogation potential should be identified during initial investigation so that evidence is preserved, parties are notified, and key deadlines are not missed.