Regarding the distribution of subrogation amounts

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Reference no: EM131911683

Sarah has a house valued at $200,000 and insured for $180,000. It is totally destroyed by fire, due to the negligence of Courtney. Sarah recovers $180,000 from her insurer, which then subrogates against Courtney. Suppose the courts decide that Courtney must pay $100,000 in damages, because that's all the money she has. How much of this $100,000 can the insurer keep, assuming that the policy has no special provision regarding the distribution of subrogation amounts?

A) $80,000 (Sarah gets the other $20,000)

B) $100,000 (Sarah will get no additional funds)

C) $20,000 (Sarah gets the other $80,000)

D) $0 (The entire $100,000 must be passed on to Sarah)

please explain

Reference no: EM131911683

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