Page 1 of 32
Subrogation Exam 2026–2027 |
Comprehensive Question Practice Test with
Answers & Rationales| Free Pdf Access
1. Subrogation is best defined as:
a) The insured’s right to sue the insurer
b) The insurer’s right to recover payments from a liable third
party after paying a claim
c) The agent’s right to commission after a loss
d) The right to cancel a policy mid-term
Answer: b) The insurer’s right to recover payments from a liable
third party after paying a claim
Rationale: Subrogation allows the insurer to “step into the
insured’s shoes” to pursue recovery.
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2. True or False: Subrogation applies only after the insured has
been fully compensated.
Answer: True (generally)
Rationale: Under the Made Whole doctrine (in most states), the
insurer cannot recover from the third party until the insured is
made whole unless the policy states otherwise.
3. Equitable subrogation arises from:
a) A written contract clause
b) Principles of fairness and unjust enrichment
c) State statute only
d) Insured’s consent after loss
Answer: b) Principles of fairness and unjust enrichment
Rationale: Equitable subrogation is judicially created;
contractual subrogation is from policy language.
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4. The “anti-subrogation rule” generally prohibits an insurer from
subrogating against:
a) Any government entity
b) Its own insured (for a covered loss under the same policy)
c) A foreign corporation
d) A subcontractor of the insured
Answer: b) Its own insured (for a covered loss under the same
policy)
Rationale: Insurer cannot sue its own named insured for a risk it
agreed to cover.
5. A waiver of subrogation clause:
a) Requires the insured to sue the tortfeasor
b) Prevents the insurer from recovering from a specified third
party (e.g., contractor)
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c) Doubles the policy limit
d) Eliminates the deductible
Answer: b) Prevents the insurer from recovering from a specified
third party (e.g., contractor)
Rationale: Often found in construction contracts to avoid lawsuits
between project participants.
6. Subrogation is typically found in which insurance lines?
a) Property
b) Auto
c) Workers’ compensation
d) All of the above
Answer: d) All of the above
Rationale: Subrogation applies in nearly all lines except some
life and health (though health has subrogation for accident-
related claims).
Subrogation Exam 2026–2027 |
Comprehensive Question Practice Test with
Answers & Rationales| Free Pdf Access
1. Subrogation is best defined as:
a) The insured’s right to sue the insurer
b) The insurer’s right to recover payments from a liable third
party after paying a claim
c) The agent’s right to commission after a loss
d) The right to cancel a policy mid-term
Answer: b) The insurer’s right to recover payments from a liable
third party after paying a claim
Rationale: Subrogation allows the insurer to “step into the
insured’s shoes” to pursue recovery.
,Page 2 of 32
2. True or False: Subrogation applies only after the insured has
been fully compensated.
Answer: True (generally)
Rationale: Under the Made Whole doctrine (in most states), the
insurer cannot recover from the third party until the insured is
made whole unless the policy states otherwise.
3. Equitable subrogation arises from:
a) A written contract clause
b) Principles of fairness and unjust enrichment
c) State statute only
d) Insured’s consent after loss
Answer: b) Principles of fairness and unjust enrichment
Rationale: Equitable subrogation is judicially created;
contractual subrogation is from policy language.
,Page 3 of 32
4. The “anti-subrogation rule” generally prohibits an insurer from
subrogating against:
a) Any government entity
b) Its own insured (for a covered loss under the same policy)
c) A foreign corporation
d) A subcontractor of the insured
Answer: b) Its own insured (for a covered loss under the same
policy)
Rationale: Insurer cannot sue its own named insured for a risk it
agreed to cover.
5. A waiver of subrogation clause:
a) Requires the insured to sue the tortfeasor
b) Prevents the insurer from recovering from a specified third
party (e.g., contractor)
, Page 4 of 32
c) Doubles the policy limit
d) Eliminates the deductible
Answer: b) Prevents the insurer from recovering from a specified
third party (e.g., contractor)
Rationale: Often found in construction contracts to avoid lawsuits
between project participants.
6. Subrogation is typically found in which insurance lines?
a) Property
b) Auto
c) Workers’ compensation
d) All of the above
Answer: d) All of the above
Rationale: Subrogation applies in nearly all lines except some
life and health (though health has subrogation for accident-
related claims).
