Knowing The Principles Of Subrogation
When our vehicle is hit by another motorist so
that it is damaged, usually directly we will ask for compensation for some money to the hitman to compensate for
the cost for repair. Because our vehicle
is still in insurance coverage, usually we will also submit a claim to the
insurance company. In insurance, this
kind of practice is actually not justified because there is a principle of
subrogation.
The
application of the principle of subrogation in insurance is usually by the way the
insurance company directly pays claims to the
insured for the losses he has suffered.
Furthermore, the insurance company will collect compensation to the third
party who for negligence has caused
losses to occur worth the claim that has been paid to the party
insured. This subrogation right will
usually be listed in the insurance policy.
Nevertheless, in its implementation depends heavily on the consideration
of the insurance company, whether to use it or not.
This
principle of subrogation is often regarded as a safeguard or companion of the
principle of indemnity. The
principle of indemnity itself is to provide compensation to the
insured in order to restore the same financial position after the
loss as the condition before the loss
occurred. If there is no principle of
subrogation, then the insured will potentially get a replacement value that is greater or double than it should be so
that it is not in accordance with the
principle. indemnity.
In
Indonesian law, the principle of subrogation is regulated in Article 284 of the
Indonesian Commercial Law which reads: "A person who has paid
the loss of an insured item, replaces the insured in all rights obtained to
third persons related to the issuance of such losses, and the insured is
responsible for every act that is can give the insurer rights to the third
person. "
The
purpose of the article is that if the insured's loss is caused by a third
party, the compensation is transferred to the third party and not to the
insurance party. However, if the
insured party still asks for
compensation to the insurance then the
insurance party has the right to ask for
compensation to the third party because the insurance party is entitled
to replace the position of the insured.
The subrogation definition itself
is actually taken from the case of "Burnand v. Rodocancachi (1882)"
in England. In such cases, the insurer, after granting indemnity to
the insured, is entitled to receive back from the insured anything he can
receive from other sources. Under this definition,
subrogation rights can only be applied to insurance contracts related to
indemnity contracts. Therefore, the
principle of subrogation cannot be applied or does not apply in life insurance
policies or self-injury insurance policies.
Why is subrogation considered a companion
to the principle of indemnity (corollary of indemnity)? To make
it easier to understand, we will
illustrate with an example of the following events: Andi insured his car to
insurance company A for a period of 12 months of coverage at his own risk (a
certain amount must be borne by Andi himself, as the insured in each loss and each incident) amounted to Rp500,000.
In the police period, Andi’s car was hit
by Iwan's car. In fact, the position of
Andi's car was parked in the right place. As a result of the incident, Andi's car suffered damage and caused losses
worth Rp3,000,000. As a result, Andi
also filed a claim for damages to Iwan and also
in parallel filed a claim with
insurance company A. Because
the losses experienced are guaranteed by
the insurance policy, insurance
company A ought to pay Andi's claim of Rp3,000,000-Rp500,000 = Rp2,500,000.
After insurance company A paid a claim
based on the principle of indemnity to Andi of Rp2,500,000, it
turned out that a few days later Andi received a compensation payment from Iwan
of Rp3,000,000. because it had hit Andi’s car until it was damaged. Preferring to
the principle of subrogation, then on a number of payments from Iwan,
Andi must pay Rp2,500,000 to insurance company A that had previously paid the claim to Andi worth Rp2,500,000.
When does Rights Subrogation Arise ?
Subrogation rights for insurers can arise from several factors, namely:
- The rights of the insured arising from an act of breaking or against the law (in English law called a "tort") such as negligence committed by others against him.
- The rights of the insured arising from a contract or agreement that he has entered with another person.
- The rights of the insured under the Law.
In addition, the subrogation rights of the
insurer can also arise from the object of coverage itself or part of the object
of coverage (rights and salvage or the rest of the goods) where the
insurer has paid indemnity based on the terms of the policy. Subrogation
rights like this are outside the subrogation or definition of
subrogation as described earlier, but rather on the application of the
principle of indemnity that does not allow the insured to enjoy a payment of
indemnity greater than full indemnity.
As for citing the common law in the
UK and also Article 284 of the Commercial Law in Indonesia, the subrogation
rights of the insurer have not arisen as long as the insurer has not paid the
relevant claim to the insured. This provision or rule can cause problems for
the insurer because after the loss that caused the claim occur, the insurer
cannot actively participate or fight on behalf of the insured in an effort to
claim the right of the insured to the party responsible for the loss. Of course, this condition can have a bad effect
on the subrogation rights of the insurer.
To ensure that the insurer's subrogation
rights run well, usually the insurer in
many policies lists subrogation provisions or clauses that allow the
handler to ask the insured, at the insurer's expense, to take steps deemed
necessary, before or after the insurer makes indemnity payments. against the insured, to obtain compensation
from other parties.
Subrogation Modification
Just like the principle of indemnity,
the principle of subrogation is not absolute so in certain things or situations
it is possible to adjust. In this regard, insurers or companies can make
modifications to the workings of subrogation. The following are some examples of
the modifications :
1.
Knock for knock Agreement. This agreement is an intercompany
agreement (agreement between insurance companies) which stipulates that
between insurance companies that regulate the motor vehicle insurance business, will
not exercise subrogation rights against each other in the event of damage to
their insured vehicles caused by a collision event between them; the vehicles of their insured.
2.
Other agreements. Agreement between the motor vehicle insurer
and the property insurer that guarantees the loss/damage of property that is
insured to the property policy due to being hit by a motor vehicle. In this
agreement, the parties agree to jointly contribute in the property losses
concerned based on agreed proportions.
3.
Waiver of subrogation in the
policy. Certain policies, such as liability
employers policies,
include a clause waiver of subrogation that contains a statement that
the insurer waives its subrogation rights in the event that an employee causes
another employee bodily injury.