Insurance subrogation is a concept that is quite new for Russian legislation, borrowed from foreign judicial practice, in particular, English and German. Therefore, when searching for ways to use it, references to foreign experience will be quite legitimate.
Method of resolving property disputes
Subrogation translated from Latin (subrogation) means replacement. Subrogation in insurance is a legally justified transfer of the right of claim, in fact, representing one of the varieties of the assignment of the right of claim. For the most significant protection of the material interests of the insured, compensation for potential damage is provided for in the contractual obligations. To resolve the property dispute, policyholders (beneficiaries) avoid rather unpleasant difficulties in finding the guilty person.
However, the insurer also has the right not to pay insurance indemnity to the beneficiary in the absence of material confirmation of the damage suffered in the form of various documents, expert opinions, etc.
The concept of regression
Regress is the right of the opposite claim, in which the person who has made compensation for the harm caused by another person has the right to demand a reverse regression to this person. For example, if a transport company, as the owner of a motor vehicle, has been compensated for the harm caused by its employee, it has the opportunity in the legal field to reimburse its costs, that is, to recourse.
In fact, this means that the insurer is not considered as a person who has indemnified for damage, since it does not act as a subject of compensation for harm, and insurance compensation is an act of compensation for losses to the insured that appeared in the process of bringing him to responsibility due to harm caused to a third party. Thus, the recourse procedure compensates the losses of the insured and not the victim.
Similarity of insurance claims
It would be a mistake to consider subrogation as one of the varieties of regressive requirements. But these concepts have similar features, subrogation and recourse in insurance are provided by contractual acts and legislative law: a regressive requirement is established by article 14 of the Federal Law on compulsory motor liability insurance, and subrogation is established by article 965 of the Civil Code of the Russian Federation only in relation to insurance legal relations. Both definitions are varieties of the right of claim arising only when another obligation exists. In addition, the primary obligation is terminated by its performance by a third party. It is this performance that is the basis for the occurrence of these insured events.
Subrogation and regression in insurance, their differences
The difference between regression and subrogation primarily lies in various mechanisms of action. If subrogation in insurance is an option of transferring a claim, then regression is already a new obligation. It should be noted that they are distinguished by their various regimes of legal regulation, as well as the limitation period.
Insurance subrogation applies to any individuals, and regression is limited to a fairly narrow circle of individuals. In addition, when transferring the right of claim for subrogation, in accordance with the law, the lender is obliged to inform the insurer of all available information and transfer documents that are essential for the insurer to determine this right of claim transferred to him.
The principle of subrogation
The basic principle of subrogation in insurance is the transfer to the insurer, which made the payment in accordance with the contract, of the right to claim compensation for the amount of loss brought to the person guilty of the damage.
The regulation of such legal relations is carried out by the insurer in compliance with the established legislative and local acts. Thus, subrogation in insurance is a special type of economic interactions based on the redistribution of risk associated with material damage to the parties involved in this process. Moreover, this type of activity is carried out by specialized organizations, accumulating insurance premiums and making insurance payments in case of loss in relation to the insured property interests. In accordance with Art. 965 of the Civil Code of the Russian Federation, unless otherwise stipulated in the contract, the insurer who paid the indemnity shall receive the right to claim this specific amount of loss from the person responsible for it.
Subrogation loss
Loss (paragraph 2 of article 15 of the Civil Code of the Russian Federation) means:
- The amount of expenses incurred at this time or in the future to restore violated rights.
- The amount of real damage expressed in loss or damage to property.
- The amount of lost profits, that is, income not received, which the injured person would have received if his rights had not been violated, if the civilian insurance turnover had occurred in the usual manner.
Thus, the compensatory nature of subrogation provides for compliance of material liability with the size of the damage caused.
Procedure for receiving a claim
Quite often, the insurance company sends a letter to the culprit of the accident containing a list of articles of the Civil Code and the circumstances of the accident, and the summarizing text notifies the need to pay off the debt for a specific amount.
However, observing the subrogation order, it is necessary to check the full package of claim documents for pre-trial resolution of a conflict situation, which should include the following items:
- Documents that determine and confirm the amount of damage caused should consist of an act of inspection of the car by an independent expert examination with photographs and a calculation of the cost of repair work or a payment account for the work performed.
- Documents confirming the fact of an accident by a guilty person. The justifying evidence is the traffic police certificate (in form 748) and a court decision or order from the state traffic inspectorate.
- Documents or their copies confirming the rights of the guilty party - a certificate of state registration, as well as insurance for the vehicle, checks for its payment and a statement about the occurrence of an insured event.
If the insurance company has not submitted all the documents substantiating the right of subrogation, it is necessary to draw up a response to the claim submitted to them. This letter can be sent by mail with a notification or personally provided to the secretary by writing down the number of the incoming document.
Drawing up a review letter
A review letter or review is prepared very carefully, and if necessary, it can be ordered from auto experts. It is necessary to check the conformity of the traffic police certificate with the declared damage for repair work, to verify the compliance of the standard hours with the technological work carried out to restore the car.
If the amount of damage is justified by the insurance company not for actually paid repair services, but in accordance with the calculation of an independent examination, then only the expert company has the right to dispute the calculation made by them. Simultaneously with the review, it is advisable to send an insurance letter to the insurance company, the purpose of which may be to reduce the amount of reimbursable loss or restructuring the debt, drawing up a schedule for its repayment. This letter can also help to focus on the seriousness of the motivation to defend one’s rights, as well as substantiate a request for reimbursement of funds used for legal services in court.
Recovery work
The collection of subrogation is usually carried out by various legal agencies and involves various types of services:
- Audit of archival data and a critical analysis of insurance contracts to determine the amount of debt and the potential for recovery.
- Preparation of documents for pre-trial damages, as well as preparation of lawsuits.
- Organization of telephone calls, electronic messages and departure at the place of residence to individuals who are debtors. In this case, the maximum emphasis is on the implementation of pre-trial recovery.
- Protecting the interests of the client in court, as well as in the bailiff service.
- Collection of cash.
- Providing a guarantee for the guilty person in an adequate assessment of the amount of subrogation regulated by law and not exceeding insurance payments.
Subrogation in insurance is an important part of this business, the continuous and high-quality work of which allows reducing the time for returning paid funds. Ultimately, it is thanks to her that the insurance company has the opportunity to significantly increase the efficiency of its activities.