Subrogation Concept of Insurance

The subrogation is a legislative right of damage reimbursement recollecting from a guilty party from the injured insured person to his insurer. For the modern market of insurance it is rather a new concept.

Let’s understand why and to whom it is necessary. The matter is that after a loss occurrence the insured driver receives practically at once the reimbursement from the insurance company. After that he completely loses his interest to a guilty party because money is in his pocket.

In its turn the insurance company wants to receive indemnification connected with insurance payment from a guilty party and to refill the balance reduced in connection with payment. Most often the insurance company with which it will work on compensation will be a guilty party or a guilty driver. In this case It is not an important fact. The main thing in this situation is that its client acts as the direct victim and just he possesses the right of collecting this sum independently of fact whether the person knows about it or not.

In this regard, the insurance company initially, when signing the contract of insurance, signs a contract with the client about rights transfer. It is necessary in order to have an opportunity to protect own interests in such situation. Initially, signing the contract on the subrogation with the client the insurer thereby doesn’t allow the client to carry out fraudulent strategy on double payment.

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