Subrogation

Aperçu

When someone else is to blame for your loss, two people owe you money: the person who caused the damage, and the insurer you paid to protect you. Collect from both and you would walk away richer than before the accident. Insurance will not allow that. Subrogation is the rule that lets your insurer, once it has paid you, chase the wrongdoer in your place and recover what it laid out, so that nobody profits from a misfortune.

In this lesson you will learn exactly what subrogation means and why it is the twin of indemnity, the right it gives the insurer to step into your legal shoes, the duty it places on you not to spoil that right, and the point at which it may be used. You will settle real claims where an excess or under-insurance means the recovery has to be shared, and you will see why the insurer can never keep a penny more than it paid.

Objectifs

  1. Define subrogation and explain its relationship to the principle of indemnity
  2. State the insurer's right to step into the legal remedies of the insured after payment of a claim
  3. Explain the duty of the insured to preserve the insurer's rights of recovery
  4. Explain when subrogation arises and how any recovery in excess of the claim is treated

Note de cours

A delivery van runs into the back of Tunde's parked car on Awolowo Road and speeds off, but a bystander notes the plate number. Tunde's insurer repairs the car and pays the bill. Weeks later the van's owner is traced, admits fault, and offers to pay for the damage. Should Tunde pocket that money too? If he did, one dent would have paid him twice. The principle that stops this, and quietly hands the second cheque to the insurer, is subrogation. It is examined in every WAEC Insurance paper and it is impossible to understand without first understanding indemnity.

Évaluation de la leçon

Félicitations, vous avez terminé la leçon sur Subrogation. Maintenant que vous avez exploré le concepts et idées clés, il est temps de mettre vos connaissances à lépreuve. Cette section propose une variété de pratiques des questions conçues pour renforcer votre compréhension et vous aider à évaluer votre compréhension de la matière.

Vous rencontrerez un mélange de types de questions, y compris des questions à choix multiple, des questions à réponse courte et des questions de rédaction. Chaque question est soigneusement conçue pour évaluer différents aspects de vos connaissances et de vos compétences en pensée critique.

Utilisez cette section d'évaluation comme une occasion de renforcer votre compréhension du sujet et d'identifier les domaines où vous pourriez avoir besoin d'étudier davantage. Ne soyez pas découragé par les défis que vous rencontrez ; considérez-les plutôt comme des opportunités de croissance et d'amélioration.

  1. Subrogation is best described as a corollary of the principle of: A. Utmost good faith B. Insurable interest C. Indemnity D. Proximate cause Answer: C
  2. To which of the following contracts does subrogation NOT apply? A. Fire insurance B. Motor own damage insurance C. Marine cargo insurance D. Life assurance Answer: D
  3. An insurer may exercise its right of subrogation: A. As soon as the loss occurs, before paying the claim B. Only after it has indemnified the insured C. At any time, whether or not it pays the claim D. Only if the insured agrees to share the recovery Answer: B
  4. An insurer pays a claim of 700,000 naira after the insured has borne an excess of 50,000 naira. It later recovers 750,000 naira from the negligent third party. How much may the insurer retain? A. 750,000 naira B. 700,000 naira C. 650,000 naira D. 50,000 naira Answer: B
  5. Subrogation rights may arise through: A. Tort only B. Contract only C. Statute only D. Tort, contract or statute Answer: D

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