Which of the Following Is Correct with Respect to the Principle

question 118

Multiple Choice

Which of the following is correct with respect to the principle of subrogation as it relates to insurance law?

• A)Subrogation refers to the principle that the insured cannot benefit from his own wrongdoing.
• B)Subrogation refers to the principle that,if an insurance company pays out on a policy,it assumes all of the rights of the insured against the person causing the loss.
• C)Subrogation refers to the principle that,if the insured does not take out enough insurance,he will be taken to be responsible for a portion of any loss incurred.
• D)Subrogation refers to the insured's right to demand payment from the insurance company if the insured-against event takes place.
• E)Subrogation refers to the practice of insurance companies taking out their own insurance where a policy involves potentially large losses or high risk.

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Definitions:

Income Statement

A financial report that summarizes the revenues, expenses, and profits/losses incurred during a specific period of time.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits.

Auditor

A professional who examines and verifies a company's financial statements and records to ensure accuracy and compliance with regulatory standards.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, including the balance sheet, income statement, and statement of cash flows.