An insurer pays £10,000 for a claim and the salvage is valued at £1,000. How much can the insurer claim from the negligent third party?

When an insurer pays a claim, such as the £10,000 in this scenario, they are entitled to recover that amount from the negligent third party responsible for the loss. The key aspect to understand is that the insurer stands in the shoes of the insured after a claim payment has been made and has the right to pursue recovery from any party whose negligence caused the loss.

In this case, the salvage value of £1,000 is the amount that could potentially be recovered through selling the salvaged items. However, the insurer's claim against the third party is based on the total amount paid out for the claim, not adjusted for potential recoveries via salvage. Therefore, the insurer can claim the full £10,000 from the negligent third party, as this represents the total loss incurred by the insurer due to the claim payment.

The options that suggest lower amounts do not take into account the entire amount paid by the insurer, which is crucial for recovery in a subrogation scenario.