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How subrogation works

Subrogation is “the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.” It is a term that is not familiar to vast majority of policy holders or people outside of the insurance industry.

If you have an insurance claim, it is important to understand that where there is any chance to recover costs from another party, your insurer use the right of subrogation in the process to recover some of their costs.

Subrogation is the right of the insurer to pursue legal action against a third party that caused an insured loss to the insured party. The intention is to recover the amount of the claim paid to the insured client for the loss.

The opposite is also true where a third party’s insurance company may exercise their right against you or where you are found legally liable for the loss suffered by their client. At this point it becomes a liability claim. A third-party liability claim arises after an incident between two vehicles and a property owner’s liability claim arises in the case of a property-owning entity.

It is best to claim for your own damages via your own insurer in the case of an accident and then allow them to attempt a recovery afterwards. Regardless of the circumstances of an event or incident where damages and resultant financial loss occurs, it is best to leave it to your insurer to address the merits of recovery. Remember that liability cannot be admitted nor can it be assumed. Your insurer should always act in the best interests of their client, whether or not they elect to pursue or defend actions on your behalf. The moment you claim from your insurance policy, your rights of recovery are handed over to your insurers.


Author:  Brian Addison, Addsure

Contact Addsure – The Leaders in Sectional Title Insurance – for fit and proper advice from advisors who understand Sectional Title. Contact us in Johannesburg (011) 704-3858; Durban (031) 459-1795; Cape Town (021) 551-5069