What gives the insurer the right to collect payment from Sally after the fire?

The correct answer is subrogation, which refers to the legal principle that allows an insurer to pursue a third party that caused an insurance loss to the insured. In this case, after Sally’s property was damaged by fire, if the insurer pays out a claim for that damage, subrogation gives the insurer the right to collect that payment back from the responsible party, assuming there is one. This process helps the insurer recover costs associated with the claim and can help keep insurance premiums lower for policyholders.

In a subrogation scenario, the insurer steps into the shoes of Sally, the insured, and can claim damages on her behalf against the entity responsible for the fire. This recovery helps the insurer offset the financial loss incurred while fulfilling its contractual obligation to Sally.

The other choices, while relevant in the context of insurance and liability, do not accurately represent the specific legal mechanism at play in this situation. Vicarious liability involves one party being held liable for the actions of another, typically in an employer-employee relationship. Estoppel relates to preventing a party from arguing something contrary to a claim made or implied by their previous actions or statements. The right of recovery could be interpreted in various ways but isn't the commonly used term to describe the process through