Chapter 10 - Subrogation And Contribution

Question 1

When might the insured be able to claim more than once for the same loss

Answer 1

If they have more than one insurance policy covering the loss.
If they have a claim and one insurance policy but can also make a claim for compensation against another person

Question 2

If a house owner did obtain compensation from a plumber after receiving an insurance claim payout what would they have to do with the money

Answer 2

They would have to pass the money to their insurance company

Question 3

What is the main purpose of subrogation

Answer 3

To prevent what is known as the unjust enrichment of the insured. In other words to prevent him from unfairly profiting from their loss and so to preserve the principle of indemnity

Question 4

Does subrogation apply to non-indemnity contracts or indemnity contracts

Answer 4

Only indemnity policies

Question 5

In subrogation when someone has succeeded in recovering from the same loss twice what Karen insurer get to require the money is paid over

Answer 5

And injunction

Question 6

When an action is taken by insurers in the name of the insured how much the loss is it for

Answer 6

The whole loss not just a portion

Question 7

When an action is taken by insurers in the name of the insured why does it have to be a Holos at once

Answer 7

The law only allows a person to sue went for a wrongful act that has been committed against them

Question 8

A common law what must the insurers do before they exercise subrogation rights

Answer 8

They must indemnify the insured (pay the claim)

Question 9

The operation of the principle of subrogation, and the way in which any recovery from a third-party is shared between the insured and the insurers, depends on what two factors

Answer 9

The amount of the recovery in relation to the loss.

Whether the insurance covers the loss in full

Question 10

If recovery is equal to the loss what does this mean

Answer 10

The amount of the recovery from the third-party will be exactly the same loss suffered by the insured. In this case the position is straightforward and no problem about sharing the money recovered as the Whole loss will be borneby the third party

Question 11

What happens if the recovery is greater than the loss

Answer 11

If there’s any surplus after the insurance have recovered and money the insured is entitled to keep it. Again, the insurer is not entitled to recover more than is paid out

Question 12

The insurer may be able to recover more than they have paid out under what doctrine

Answer 12

Abandonment and salvage

Question 13

What is an ex Gracia payment

Answer 13

A payment outside the terms of the policy, making it clear that no legal obligation to pay is accepted, and payment is made merely as a favour

Question 14

Is the insured entitled to retain any of the amount secured by ex gratia payment

Answer 14

Yes

Question 15

What ways do subrogation rights most frequently arise

Answer 15

In tort. Examples the third-party will have negligently damage property belonging to the insured which is covered under the latters property insurance

Question 16

How will subrogation rights usually be founded on

Answer 16

On the tort of negligence

Question 17

What is it an example of

Property insurers who pay a claim for damage to buildings may have rights of recovery against the tenant of the insured, who is legally responsible for the damage on the terms of the lease

Answer 17

Subrogation under contract

Question 18

How do you marine insurers have a subrogation rights

Answer 18

Under contract they pay shippers for damage to cargo against the carrier that arise in the contract of carriage

Question 19

How can subrogation rights in contract arise from indemnity clauses

Answer 19

Well there are hold harmless agreement where a contract in place a contract A agreed to back payback contract B should B suffer a particular type of loss

Question 20

On the doctrine of subrogation what is recovery by statute for the riot damages act

Answer 20

The right passes to insurers and is enforceable by them claim for riot damage and is enforceable by them against the polishing body in the district in which the riot occurs

Question 21

What does the right damages act allow

Answer 21

The insurers to sure the relevant authority in their own name

Question 22

Why wouldn’t an insurer exercise their right to subrogation

Answer 22

Market agreements
Contractual waiver of subrogation
Co-insurance cases
Public policy

Question 23

Under the modification of subrogation rights what are market agreements

Answer 23

General agreement between insurance companies. So insurers agree to waive the right to Subrogation against third parties. This is particularly common by the third-party is insured

Question 24

For a market agreement why won’t an insurer tend to claim their subrogation rights against another insurance company when the third-party is covered by their own liability insurance

Answer 24

The consequence that is what insure all end up claiming from another. This can result in extra admin costs and possibly wasteful litigation between the two insurers if They can’t agree on who is to blame

Question 25

What are knock for knock agreements

Answer 25

Mostly found in motor insurance
When an accident occurs involving vehicles covered by different insurers, each insurer pay for damage to its own policy holders vehicle and gives up any subrogation rights that may exist against the other motorist.

Question 26

In what circumstances do insurers not pursue rights of recovery against others

Answer 26

People who negligently injure their fellow employees. Following the Lister v Romford case

Question 27

What is the contractual waiver of subrogation clause

Answer 27

Wait insurers agree the particular insured that they will not exercise subrogation rights against certain other parties who are associated with the insured. This could be affiliated or subsidiary companies of the policyholder

Question 28

How do you insurance give up their superation rights under public policy

Answer 28

On the Lister versus Romford insurers have January agreed to give up their subrogation rights against negligent workers who injure their follow employees in the course of employment

Question 29

What is contribution

Answer 29

Contribution is the right of an insurer to call upon of a similarity, but not necessarily equally liable to the same insured, to share the cost of an indemnity payment

Question 30

Contribution is often further modified by what between insurers

Answer 30

Market agreements

Question 31

Contribution will arise only when the following conditions are satisfied

Answer 31

Each policy is liable for the loss.
Each insures the same interest in the subject matter.
Two or more policies of indemnity exist.
Each insures the subject matter of the loss.
Each insures a peril which belongs to the loss.

Question 32

In contribution does the subject matter have to be exactly the same when there is two or more policies

Answer 32

No

Question 33

In contribution if the insured chooses only go to one insurer and recover in full from that insurer. what can the insurer do

Answer 33

The insurer who pays my den, and only then, claim a contribution from the other insurer

Question 34

What is a contribution condition

Answer 34

Sets out how the loss is to be met if the insured has another policy which covers it. The effect of the condition will be to change or override the common law rules described above

Question 35

What is an escape clause

Answer 35

Is a condition that effectively forbids insured from taking out another policy without the consent of the insurers

Question 36

What is the original purpose of an escape clause

Answer 36

Prevent the insured from secretly arranged double multiple insurances and so guard against possible fraud

Question 37

What is a non-contribution clause

Answer 37

May not prohibit other insurances being arranged without consent in the way described, but simply state there will be no liability for any loss which is insured by no policy

Question 38

What is a more specific insurance clause

Answer 38

Where the loss is covered by a more specific insurance, the policy will respond only when the cover is provided by the more specific insurance has been exhausted

Question 39

What is maximum liability method

Answer 39

The losses shared by their insurers in proportion to the maximum amount of cover that is available into each policy which, in the case of property insurance is usually equivalent to the sum insured

Question 40

What is independent liability method

Answer 40

The liability of each insurer for the particular loss which has occurred is assessed as though its policy with only one in force. The figure that results in each case represents the independent liability of the insurer for the loss. The losses and shared in proportion to the independent liabilities of the two insurer

Question 41

In a property insurance if the subject matter of insurance is identical what method of contribution would you use

Answer 41

The maximum liability method

Question 42

In property insurance and if the case of policy is that the subject to average or where the lower loss limit applies within a greater sum insured what method of contribution would you use

Answer 42

Independent liability method

Question 43

What is now classed as a proper basis for the calculation of contribution in the case of liability insurance

Answer 43

Independent liability method

Question 44

How can market agreements between insurers modify the application of contribution itself (two ways)

Answer 44

Insurers may agree to share the losses in cases where, strictly speaking, contribution does not arise in law.
They may sometimes agree to waive rights of contribution in cases where such a right clearly exists, so that the whole of the loss is borne by one insurer

Question 45

What is the purpose of a market agreement

Answer 45

Prevent disputes between insurers and reduce operating costs

Question 46

Why does the law allows subrogation

Answer 46

To prevent the Fingest enrichment of the insured and preserve the principle of indemnity

Question 47

Can insurers claim money which the insured received as a gift by the way of subrogation

Answer 47

Where the person who give some money in tens it to be for the sole benefit of the insured it cannot be claimed by the way of subrogation

Question 48

What are the three main sources of subrogation rights

Answer 48

In tort in contract or under statue

Question 49

In what circumstances would the maximum liability not be used

Answer 49

If one policy provides unlimited cover as in the case of liability insurance is the method would not work at all