An insured is injured in an accident caused by a negligent driver. Her Ohio A&H insurer pays her medical benefits. What right allows the insurer to pursue recovery from the negligent driver?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Subrogation is the right of an insurer that has paid benefits to step into the insured's shoes and pursue the responsible third party, and Ohio Revised Code § 2323.44 governs insurers' subrogation rights with respect to claims of insured persons for injury caused by third parties. After paying the medical benefits, the insurer may recover from the negligent driver to the extent of the benefits paid, which prevents the insured from double recovery and keeps the wrongdoer from escaping liability. The Ohio Department of Insurance includes subrogation among the A&H policy concepts tested on the examination.
Why the other options are wrong
- B) Reinsurance transfers part of the insurer's own risk to another insurer; it has no effect on the insured's claim against a negligent third party.
- C) Coordination of benefits allocates payment among multiple insurance policies covering the same insured; it does not create a right against the at-fault driver.
- D) Assignment transfers ownership of the policy itself, which is unrelated to the insurer's recovery right after paying benefits.
Memory hook
Insurer pays, then wears the insured's shoes to sue.