The temporary transfer of title to an insurance company for litigation purposes is called what?

The temporary transfer of title to an insurance company for litigation purposes is called what?

• A. Subrogation
• B. Escrow
• C. Lien
• D. Adverse possession

Answer: (A)

Subrogation is the insurer’s right to step into the insured’s position after paying a claim and pursue the party responsible for the loss. When an insurer covers a claim, it effectively takes over the insured’s legal claim against the at-fault party so it can recover those costs. This is why it’s described as a temporary transfer of rights to litigate in favor of the insurance company—the insurer is substituting its own right to sue in place of the insured’s. This fits the scenario because the goal is to obtain reimbursement from the party that caused the loss, rather than simply holding funds or securing a debt. It isn’t about holding title in escrow, nor about creating a lien or acquiring title by possession. Subrogation specifically addresses transferring the right to pursue litigation in the pursuit of recovery after a claim payment.

Subrogation is the insurer’s right to step into the insured’s position after paying a claim and pursue the party responsible for the loss. When an insurer covers a claim, it effectively takes over the insured’s legal claim against the at-fault party so it can recover those costs. This is why it’s described as a temporary transfer of rights to litigate in favor of the insurance company—the insurer is substituting its own right to sue in place of the insured’s.

This fits the scenario because the goal is to obtain reimbursement from the party that caused the loss, rather than simply holding funds or securing a debt. It isn’t about holding title in escrow, nor about creating a lien or acquiring title by possession. Subrogation specifically addresses transferring the right to pursue litigation in the pursuit of recovery after a claim payment.