Article
| Publication year | 2015 |
| Pages | 44 |
July, 2015
Insurance Subrogation The What, The Who, and The How
Michael Swensen, J.
As an attorney, I am constantly asked what type of law I practice. When I respond by telling people that I work in insurance subrogation, it becomes clear that very few people know what I do for a living. This lack of understanding not only exists with the average individual but is also commonly found in the legal community and among litigation professionals themselves. In fact, upon entering this practice area, I had little understanding of insurance subrogation. The purpose of this article is to help clarify and simplify the practice area of insurance subrogation and to hopefully prepare attorneys to work in this area of law.
The What
Insurance subrogation is a concept that developed out of equitable principles. See Educators Mut. Ins. Ass’n v. Allied Prop. & Cas. Ins. Co., 890 P.2d 1029, 1030–31 (Utah 1995). In its simplest form, subrogation allows an individual, corporation, or other entity, which has paid money to a third party for a claim, to stand in the shoes of that person and to assert all available legal claims. See Martin v. Hickenlooper, 59 P.2d 1139, 1141 (Utah 1936). One of the best examples to explain insurance subrogation, or subrogation in general, is the example of an insured individual involved in an accident with an uninsured motorist. In a claim involving an uninsured motorist, the insurance company pays the claim of its insured under an existing uninsured motorist policy. After paying the claim of its insured, the insurance company then steps into the shoes of its insured, as subrogee. As subrogee, the insurance company may bring any and all claims originally held by its insured against the uninsured motorist. It is upon filing an action as a subrogee that an insurance subrogation case begins.
The Who
Upon bringing a subrogation action, it is important that each party, plaintiff and defendant, understand who the parties to the litigation are. Continuing with the above example, the insurance company would be the real party plaintiff and the uninsured tortfeasor would be the real party defendant. While identifying the appropriate parties seems straightforward, there is a tendency for people to get confused.
One of the most common misconceptions in an insurance subrogation action is that the defendant believes that the insurance company’s insured is a party to the litigation. This misconception is not supported by applicable case law and often leads to frustrating consequences.
In Utah, and throughout the Tenth Circuit, it has been consistently...
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