When must a waiver of subrogation be executed?

A waiver of subrogation is a legal agreement that prevents an insurance company from seeking reimbursement from a liable third party for the loss it has covered. Executing this waiver is crucial because it needs to be in place before a loss occurs to be effective. When a waiver is established prior to an incident, it allows the policyholder to protect their own interests, ensuring that they do not inadvertently give the insurance company the right to pursue recovery from someone else after a claim is made.

If the waiver were executed after the loss or at any point during the claims process, it could complicate the situation, as the insurance company would have the right to pursue subrogation unless the waiver specifically addressed any actions taken after a loss. Moreover, executing the waiver only during policy renewal would not ensure immediate protection for claims arising from incidents occurring between renewals.

Overall, executing the waiver before a loss provides clarity and protection to the insured, making it the correct approach in this context.