By accepting $10,000 from his own insurance, how much has James waived the right to sue Andrea for?

When James accepts the $10,000 from his own insurance, he is essentially settling or compensating for his losses up to that amount. In insurance claims, the principle of indemnity applies, which aims to make the insured whole but not allow for a profit from the insurance claim. By accepting the $10,000, it means James has received compensation for part of his loss claimed against Andrea and, in turn, waives his right to pursue further compensation from Andrea for that amount.

If James's total loss was $12,000, accepting the $10,000 means he can only claim the remaining $2,000 directly from Andrea. This means he is waiving the right to sue her for the amount already compensated by the insurance, which is $10,000. Therefore, given that the total loss was $12,000 and after accepting the payment, James has effectively released Andrea from any further liability for that amount above the net residual loss, his right to sue Andrea has been waived to the extent of the compensation received.

Thus, the correct answer reflects the amount that is waived from any further claims against Andrea, which is $10,000 of the original $12,000 loss, leaving him with only a residual claim of