SUBROGATION VARIATIONS

Posted in Uncategorized

My Dear Readers, you must all be wondering whether subrogation can arise in all insurance cases – and if so, how?  Those of you who are addicted to the drama of insurance coverage, you know the answers.  Don’t be shy.  But for the rest of us, a basic primer might be in order.  It’s the new year, so let’s refresh.

  1.     Contractual Subrogation

The parties agree that one has a right to step into the shoes of the other in certain circumstances.

Examples where this may occur:    

  • Construction Contracts
  • Insurance Contracts
  • Real Estate Contracts

2.      Legal Subrogation

Statutes grant someone a right to raise this principle.

Examples where this may occur:    

  • Workmen’s compensation claims.

3.       Equitable Subrogation

An insurer, who pays a policyholder for a loss, may be subrogated to the rights of the policyholder.  The insurer can bring a lawsuit against the party who is truly at fault.  This claim often arises in equity.  Courts have determined that it is only fair that the economic burden be shifted onto the party who is really responsible for the loss.

Examples where this may occur:    

  • Medical insurers who have paid the bills for someone who is injured in an accident.  The insurer can later bring a claim against the person who caused the injury.

SUBROGATION LIMITATIONS

A person’s subrogation rights can be no greater than the rights of the person in whose shoes he is standing.

In other words, in the insurance context, an insurance company cannot recover more than the policyholder would be able to recover from the actual wrongdoer.

Leave a Reply