Subrogation 代位

Definition 定義

Subrogation is the right of an insurer that has indemnified the insured under a policy to stand in the insured's place and take over all the insured's rights and remedies against third parties, so that it can recover what it has paid. These rights pass to the insurer whether or not the insured has already started to enforce them.

Subrogation follows directly from the principle of indemnity. If the insured could claim from the insurer and also recover from the third party who caused the loss, they would be compensated twice and end up better off than before the loss, which would break the indemnity principle. Subrogation stops the insured profiting from the loss and makes sure the wrongdoer still bears the cost in the end.

Because it comes from indemnity, subrogation applies only to contracts of indemnity, such as property, motor, marine and liability insurance. Life insurance and personal accident cover that pays fixed benefits are not contracts of indemnity, so subrogation does not normally apply to them.

How Arising 如何產生

Through subrogation the insurer acquires only the rights the insured already has, and never more. If the insured has no right to recover from anyone, there is nothing for the insurer to take over.

Tort: a third party causes the loss through a civil wrong such as negligence, nuisance or trespass. Examples are a driver who negligently crashes into the insured car, or an upstairs occupier whose carelessness floods the flat below.

Contract and statute: the insured may have a contract that makes someone else responsible for the loss. For example, a carrier may be liable for damage to goods under the contract of carriage, or a lease may require the tenant to pay for damage to the premises. Where a statute gives the insured a right to compensation from someone, the insurer can also take over that right after paying the claim.

The subject matter itself (salvage): after paying for a total loss, the insurer is entitled to whatever value remains, such as a stolen car that is later recovered or damaged goods that can still be sold. Otherwise the insured would keep the salvage as well as receiving full payment, and so would profit from the loss.

How Applicable 如何適用

At common law the insurer can exercise subrogation rights only after it has indemnified the insured. In practice, policy conditions usually bring this forward, so that the insurer can take over the claim against, or the defence of a claim by, a third party before paying. The insurer normally brings the action in the insured's name, and the insured must give reasonable help.

The insurer can keep recoveries only up to the amount it has paid, and anything above that belongs to the insured. For example, if the insurer paid HK$80,000 for the full loss and later recovers HK$90,000 from the third party, the extra HK$10,000 must go to the insured.

The insured must not do anything that prejudices the insurer's subrogation rights, such as releasing the third party from liability or settling with them without the insurer's agreement. If the insured does so, the insurer may reduce the claim payment, or recover from the insured, to the extent its rights have been damaged. Likewise, if the insured has been indemnified and then receives compensation from the third party, they must hand that money to the insurer so they do not benefit twice.

Other Considerations 其他考慮因素

An insurer cannot exercise subrogation against its own insured. Where a policy is in the joint names of more than one party, such as an owner and a mortgagee, the insurer generally cannot pursue one of the insureds, even if that insured caused the loss.

Waiver of subrogation: an insurer may agree in the policy not to exercise subrogation against certain parties, such as subsidiary or associated companies of the insured, or a tenant for commercial reasons. Once it has given up the right, the insurer cannot pursue those parties.

Knock-for-knock agreements: motor insurers may agree that, when their insured vehicles collide, each will pay for its own policyholder's vehicle damage regardless of who was at fault, and neither will pursue the other by subrogation. This saves investigation and legal costs. Such an agreement binds only the insurers, and does not affect the insured's right to claim uninsured losses, such as the excess, directly from the person at fault.

Subrogation and contribution both follow from indemnity but are different. Subrogation is the insurer recovering from a third party who caused the loss. Contribution is the sharing of a claim between insurers that cover the same loss.