The concept of Waiver of Subrogation is most closely related to which idea?

• A. Indemnification
• B. Transferring Risk to a Third Party
• C. Relinquishing the Right to Seek Recovery from Another Party
• D. Providing Coverage for Property Damage

Answer: (C)

This item tests understanding of how a waiver of subrogation works in insurance. Subrogation is the insurer’s right to step into the insured’s shoes and recover costs from the party responsible for the loss after paying a claim. A waiver of subrogation is a contractual agreement that the insurer will not pursue that recovery from the other party. In other words, it relinquishes the insurer’s right to seek reimbursement from another party.

This best describes why the concept is about giving up or waiving the right to recover from someone else. Indemnification involves compensating or protecting someone from loss (often a liability relationship), but it isn’t specifically about the insurer giving up its recovery rights. Transferring risk to a third party and providing coverage for property damage describe broader risk-transfer or coverage aims, not the insurer’s waiver of its right to pursue recovery.