Subrogation

Grand Prairie attorneys and those in Fort Worth, Dallas, Hurst, Euless, Bedford, Garland, and other areas in the metroplex area have to keep up with legal issues related to subrogation. Many insurance situations involve subrogation, especially cases involving injury claims.
There are three types of subrogation, (1) equitable, (2) contractual, and (3) statutory.
(1) Equitable subrogation arises by operation of law. While insurance contracts typically give an insurer a right to subrogation, upon payment of a loss, an insurer is equitably subrogated to any right the insured may have against a third party causing the loss, whether or not the policy provides expressly for subrogation.
The doctrine of equitable subrogation is applied liberally and is broad enough to include every instance in which one person, not acting voluntarily, has paid a debt for which another was primarily liable and which in equity and good conscience should have been discharged by the latter.
Equitable subrogation is granted to the insurer because otherwise the insured would receive a double recovery, upon payment by the tortfeasor, which the law does not sanction. This is told us by the Texas Supreme Court in court decisions. There are exceptions to the equitable subrogation rights of most insured’s. An experienced Insurance Law Attorney will know these exceptions.
(2) Contractual subrogation — called “conventional” subrogation — arises by contract between the parties. Some insurance policies expressly provide a subrogation right to the insurer and the policy language addresses its scope and limits.
Here is an example In one case an owner title insurance policy provided:
The Company shall be subrogated to and entitled to all rights and remedies that the insured claimant would have had against any person or property in respect to the claim had this policy not been issued. If requested by the Company, the insured claimant shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect this right of subrogation. The insured claimant shall permit the Company to sue, compromise or settle in the name of the insured claimant and to use the name of the insured claimant in any transaction or litigation involving these rights or remedies.
An experienced Insurance Law Attorney is also able to know the exceptions to having to pay these subrogation rights and use these exceptions for the purpose of maximizing benefits to the client.
(3) Statutory subrogation is a right created by statute and is governed by the terms of the statute under which it is claimed as a matter of statutory construction. This subrogation basis is used frequently by insurers because of the contractual and equitable subrogation rights already possessed by them.
An example of statutory subrogation is found in the laws dealing with workers compensation. When a worker is injured on the job and the injury is the result of a third party and the workers compensation carrier pays benefits to the injured worker, the workers compensation carrier is subrogated to the workers right of recovery. However, that same law allows for the workers compensation carrier to have the subrogation recovery amount reduced when the worker has an attorney helping with the recovery.