Which scenario is the right of subrogation most likely to be employed by the insurer?

• A. An insured files a homeowners claim for stolen jewelry. An investigation reveals that the jewelry is still in the insured's possession.
• B. An investigation reveals that an insured set her own business on fire.
• C. An insured files a claim for collision damage from a hit and run accident, when in fact he backed into a utility pole.
• D. A claims rep discovers that their insured's car accident was caused by a road contractor who left equipment lying in the travel lanes of a highway.

Answer: (D)

Subrogation lets an insurer recover paid losses from the party legally responsible for the damage after the claim is paid. The scenario that fits best is when a road contractor left equipment in travel lanes, causing the insured’s car accident. That means a liable third party exists, so the insurer can pursue recovery from that party or their insurer to reimburse the claim payment. The other situations involve losses caused by the insured themselves or no third party to pursue: stolen jewelry still in the insured’s possession has no third party to claim against, setting a business on fire is the insured’s own action, and backing into a utility pole is also the insured’s fault. Subrogation would apply only if another party was at fault and financially responsible.