___________ is contractual right of recovery that entitles the insurer to any proceeds from the disposal of damaged property for which the claim has been made.
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A. B. C. D.D
The correct answer is C. Subrogation.
Subrogation is a legal principle that allows an insurer to assume the rights of its policyholder after paying a claim for damages. This means that the insurer can seek recovery from any third party who may have caused the loss or who may be responsible for compensating the policyholder.
In the case of property insurance, subrogation enables the insurer to recover the costs of the claim by taking possession of the damaged property and selling it for salvage value. The insurer then applies the proceeds from the sale to the amount of the claim paid, reducing its overall losses.
For example, if a policyholder's car is damaged in an accident caused by another driver, the policyholder's insurance company may pay for the repairs or replacement of the car. The insurer can then pursue the other driver or their insurance company for reimbursement of the costs it paid out on behalf of its policyholder.
Subrogation helps to prevent insurance fraud by holding responsible parties accountable for their actions and preventing policyholders from receiving double compensation for the same loss. It also helps to keep insurance premiums affordable by reducing the overall cost of claims paid by insurers.