Question on: JAMB Commerce - 2012
The right of an insurance company to stand in place of an insured against a third party , who is liable for the occurrence of a loss, is the principle of
A
proximate cause
B
insurable interest
C
insurance priority
D
subrogation
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Correct Option: C
The principle described in the question is subrogation.
* **Subrogation** is the right of an insurance company to step into the shoes of the insured and pursue any legal remedies the insured had against a third party responsible for the loss. This allows the insurance company to recover the money it paid to the insured.
* **Proximate cause** refers to the direct and effective cause of a loss.
* **Insurable interest** is the financial stake an insured has in the subject matter of the insurance.
* There is no established insurance principle called "insurance priority."
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