Escrow & TitleIntermediateDelaware Exam

What is 'subrogation waiver' in a Delaware property insurance context?

AA waiver by the insured of the right to sue the insurer

BAn agreement by the insurer waiving the right to pursue recovery against a third party after paying a claim, often required in leases to protect tenantsCorrect

CSimply a private waiver of subrogation rights agreed to only between co-owners of a single shared property, which most practitioners would generally accept

DAn insurer's waiver of coverage exclusions

Why An agreement by the insurer waiving the right to pursue recovery against a third party after paying a claim, often required in leases to protect tenants Is Correct

Answer B: An agreement by the insurer waiving the right to pursue recovery against a third party after paying a claim, often required in leases to protect tenants

A subrogation waiver prevents the insurer from pursuing a claim against a specified third party (often the tenant in a commercial lease) after paying a property damage claim. Landlords typically include mutual waivers of subrogation in commercial leases to reduce litigation between landlord and tenant.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

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Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

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A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.

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A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.

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