13. When an insured gives the insurer the right to recover from a third party is called
Answer: D
Subrogation
When an insured gives the insurer the right to recover from a third party, this process is known as subrogation. It allows the insurer to pursue recovery from a third party responsible for a loss after compensating the insured.
A) Waiver
Waiver refers to the voluntary relinquishment of a known right, which does not involve the right to recover from a third party. It is unrelated to the transfer of recovery rights from the insured to the insurer.
B) Estoppel
Estoppel is a legal principle that prevents a party from arguing something contrary to a claim made or position taken previously. It does not pertain to the rights of recovery against third parties.
C) Assignment of loss
Assignment of loss involves transferring the rights to a claim or loss to another party but does not inherently include the insurer's right to pursue recovery from a third party. Thus, it does not accurately describe the process in question.
D) Subrogation
Subrogation is the correct term that describes the insurer's right to pursue recovery from a third party after compensating the insured. This legal mechanism enables insurers to recoup losses and helps maintain the principle of indemnity.
Conclusion
Subrogation is the definitive term that describes the process whereby an insurer gains the right to recover from a third party responsible for a loss. All other options—waiver, estoppel, and assignment of loss—do not accurately reflect the concept of transferring recovery rights and thus fail to answer the question appropriately.