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JAMB Commerce 2009 Question 20

Question 20

Insurance

The principle of insurance which entitles an insurance company to take any advantage due to the insured after full indemnity is

  1. A.contribution
  2. B.subrogation
  3. C.proximate cause
  4. D.utmost good faith
Show the answer and explanation

Answer: B (subrogation)

Explanation

Under subrogation the insurer, having paid in full, takes over the insured's rights, e.g. to salvage or to sue.