News stories frequently surface which tug at readers’ heartstrings. Landlord sues tenant whose unattended candle burned the apartment down. Property owner sues estate of driver who was killed when his car ran into a cottage. Multinational corporation sues small-town local business for shoddy roof repairs.
Often these stories are accompanied by descriptions of the dismay and consternation experienced by the defendant in these cases.
While those of us in the insurance industry are nodding sagely, it is rare to meet a lay person (or journalist) who knows what “subrogation” is.
This is not good. Insureds end up screaming at client service representatives, the news-reading public stews in their juices over the perceived injustice, and insurance defence lawyers are not sure where to look.
Nobody in the insurance industry really enjoys explaining to an insured that they are likely to be named in a lawsuit (either as plaintiff or defendant) over damages which have already been paid by insurance, and that the insurer is entitled to do so because of a subrogation clause buried deep in the legalese of the insurance contract.
At the same time, there has not been much apparent effort expended by either the mass media or the insurance industry to promote a mutual understanding of the subtext of many stories, which concern the redistribution of insurance monies rather than an attack on the life savings of a sympathetic defendant or the profits of a mom-and-pop business.
Question of the day: What is the best way to address this? Let us know what you think.