Page 1 of 185
Subrogation Exam 2026–2027 |
Comprehensive Question Practice Test with
Answers & Rationales| Free Pdf Access
Q1. What is the legal definition of subrogation?
A) The transfer of an insured's rights to sue a third party to the
insurer after the insurer pays a claim
B) The insured's right to sue their own insurer for bad faith
C) The insurer's right to deny coverage for any reason
D) The policyholder's right to cancel the policy at any time
Answer: A) The transfer of an insured's rights to sue a third
party to the insurer after the insurer pays a claim
Rationale: Subrogation is the substitution of the insurer in place
of the insured for the purpose of pursuing recovery from a third
party who caused the loss. The insurer steps into the insured's
shoes.
,Page 2 of 185
Q2. What is the primary purpose of subrogation in insurance
law?
A) To allow insurers to avoid paying claims
B) To prevent the insured from receiving a double recovery and
to hold the responsible party accountable
C) To reduce insurance premiums for all policyholders
D) To eliminate the need for deductibles
Answer: B) To prevent the insured from receiving a double
recovery and to hold the responsible party accountable
Rationale: Subrogation serves two core purposes: (1) preventing
the insured from recovering twice for the same loss, and (2)
ensuring that the party at fault ultimately bears the financial
responsibility.
,Page 3 of 185
Q3. Under the doctrine of subrogation, after an insurer pays a
claim, the insurer:
A) Has no further rights against the responsible third party
B) Steps into the shoes of the insured and acquires the insured's
rights against the tortfeasor
C) Must refund the deductible to the insured
D) Must reduce future premiums
Answer: B) Steps into the shoes of the insured and acquires
the insured's rights against the tortfeasor
Rationale: Subrogation allows the insurer to stand in the place of
the insured, asserting any legal claims the insured had against
the responsible party.
Q4. Which of the following is an essential element of equitable
subrogation?
A) A written contract between the insurer and the insured
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B) Payment by the insurer to the insured for a loss
C) A court order approving the subrogation
D) Consent of the tortfeasor
Answer: B) Payment by the insurer to the insured for a loss
Rationale: For equitable subrogation to arise, the insurer must
have paid a loss on behalf of the insured. Payment is the
triggering event that creates the subrogation right.
Q5. Subrogation rights arise from:
A) The insurance policy contract and equitable principles
B) Federal statute only
C) State criminal codes
D) The tortfeasor's consent
Answer: A) The insurance policy contract and equitable
principles
Subrogation Exam 2026–2027 |
Comprehensive Question Practice Test with
Answers & Rationales| Free Pdf Access
Q1. What is the legal definition of subrogation?
A) The transfer of an insured's rights to sue a third party to the
insurer after the insurer pays a claim
B) The insured's right to sue their own insurer for bad faith
C) The insurer's right to deny coverage for any reason
D) The policyholder's right to cancel the policy at any time
Answer: A) The transfer of an insured's rights to sue a third
party to the insurer after the insurer pays a claim
Rationale: Subrogation is the substitution of the insurer in place
of the insured for the purpose of pursuing recovery from a third
party who caused the loss. The insurer steps into the insured's
shoes.
,Page 2 of 185
Q2. What is the primary purpose of subrogation in insurance
law?
A) To allow insurers to avoid paying claims
B) To prevent the insured from receiving a double recovery and
to hold the responsible party accountable
C) To reduce insurance premiums for all policyholders
D) To eliminate the need for deductibles
Answer: B) To prevent the insured from receiving a double
recovery and to hold the responsible party accountable
Rationale: Subrogation serves two core purposes: (1) preventing
the insured from recovering twice for the same loss, and (2)
ensuring that the party at fault ultimately bears the financial
responsibility.
,Page 3 of 185
Q3. Under the doctrine of subrogation, after an insurer pays a
claim, the insurer:
A) Has no further rights against the responsible third party
B) Steps into the shoes of the insured and acquires the insured's
rights against the tortfeasor
C) Must refund the deductible to the insured
D) Must reduce future premiums
Answer: B) Steps into the shoes of the insured and acquires
the insured's rights against the tortfeasor
Rationale: Subrogation allows the insurer to stand in the place of
the insured, asserting any legal claims the insured had against
the responsible party.
Q4. Which of the following is an essential element of equitable
subrogation?
A) A written contract between the insurer and the insured
, Page 4 of 185
B) Payment by the insurer to the insured for a loss
C) A court order approving the subrogation
D) Consent of the tortfeasor
Answer: B) Payment by the insurer to the insured for a loss
Rationale: For equitable subrogation to arise, the insurer must
have paid a loss on behalf of the insured. Payment is the
triggering event that creates the subrogation right.
Q5. Subrogation rights arise from:
A) The insurance policy contract and equitable principles
B) Federal statute only
C) State criminal codes
D) The tortfeasor's consent
Answer: A) The insurance policy contract and equitable
principles
