Subrogation requires net recovery to reimburse the insurer, with excess as an advance against future benefits. Which term describes this mechanism?

• A. General Provisions
• B. Subrogation
• C. Waiting Period
• D. Average Weekly Wage

Answer: (B)

Subrogation is the process that fits this description. After the insurer pays a claim, it steps into the insured’s position and pursues recovery from the party responsible for the loss. The net recovery goes back to reimburse the insurer for the claim paid. If the recovery amount is higher than what the insurer paid, the excess can be treated as an advance against future benefits—effectively reducing future obligations or benefits owed to the insured. This mechanism prevents double recovery and keeps the insured from being paid twice for the same loss. The other terms refer to unrelated concepts: General Provisions is a broad contractual section, Waiting Period is a time before benefits begin, and Average Weekly Wage relates to wage calculations in some workers’ compensation contexts.