An insurer pays a $60,000 homeowners claim after the insured's adult son negligently caused a kitchen fire while visiting. The son is not a named insured on the policy. Which statement BEST describes the insurer's subrogation rights?

Why this is the answer

Subrogation allows an insurer that has paid a claim to step into the insured's legal shoes and pursue the negligent third party. However, most jurisdictions limit or bar subrogation against household family members — especially resident relatives — because permitting it would undermine the purpose of the coverage. If the insurer recovered from the son, it would effectively be collecting from the same household the policy was meant to protect. The key factual question is whether the son qualifies as a 'resident relative' under the policy. A visiting adult child who permanently resides elsewhere may not qualify, potentially opening subrogation rights. A waiver of subrogation endorsement explicitly surrenders these rights against named parties. Per FL Outline §III, subrogation rights and limitations are tested.