Washington State Insurance Practice Exam 2026 – Comprehensive All-in-One Guide to Exam Success!

Question: 1 / 400

Which of the following best describes the primary purpose of subrogation?

To provide additional coverage to the insured

To recover costs from third parties after a claim

The primary purpose of subrogation is indeed to recover costs from third parties after a claim. When an insurance company pays a claim to its insured for a loss, it often has the right to pursue the responsible third party to recover that amount. This process allows the insurer to recoup its expenses when another party is at fault and ultimately reduces the overall costs of providing insurance.

Subrogation benefits not only the insurance company but also helps in keeping premiums lower for policyholders over time, as it allows insurers to recover funds that might otherwise lead to increased rates. By pursuing recovery, the insurance company strives to maintain a stable financial condition while ensuring fairness among all stakeholders involved.

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To terminate a policy at the insurer's discretion

To evaluate claims before approval

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