Which of the following is NOT one of the four essential elements of an insurance contract?

• A. Utmost good faith
• B. Indemnity
• C. Representations
• D. Subrogation

Answer: (D)

Subrogation is a post-loss right, not a building block for creating the contract. After the insurer pays a claim, it can step into the insured’s rights to recover from the party at fault, but this right operates after indemnity has occurred. The essential elements used when forming and underwriting an insurance contract focus on truthful disclosure (utmost good faith), the obligation to restore the insured to their financial position (indemnity), and the information relied on by the insurer (representations). Since subrogation pertains to after-loss recovery rather than the contract’s creation or its fundamental obligations, it isn’t considered one of the four essential elements.