Lesson Notes By Weeks and Term - Senior Secondary 1
Subrogation
Subrogation
Term – 2nd Term
Week: 7
Class: Senior Secondary School 1
Age: 15 years
Duration: 40 minutes of 2 periods each
Date:
Subject: Insurance
Topic:- Subrogation
SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to
INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source
INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures
INSTRUCTIONAL PROCEDURES
PERIOD 1-2
|
PRESENTATION |
TEACHER’S ACTIVITY |
STUDENT’S ACTIVITY |
|
STEP 1 INTRODUCTION |
The teacher reviews the previous lesson on indemnity |
Students pay attention |
|
STEP 2 EXPLANATION |
He defines subrogation and describes how it works. He further gives examples of subrogation
|
Students pay attention and participates |
|
STEP 3 DEMONSTRATION |
He outlines the subrogation process for the insured He discusses some benefits of subrogation and outlines the waivers of subrogation |
Students pay attention and participate |
|
STEP 4 NOTE TAKING |
The teacher writes a summarized note on the board |
The students copy the note in their books |
NOTE
SUBROGATION
Subrogation is a right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss.
How Subrogation Works
In most cases, an individual’s insurance company pays its client’s claim for losses directly, then seeks reimbursement from the other party, or their insurance company. In such cases, the insured receives prompt payment, and then the insurance company may pursue a subrogation claim against the party at fault for the loss.
Insurance policies may contain language that entitles an insurer, once losses are paid on claims, to seek recovery of funds from a third party if that third party caused the loss. The insured does not have the right to file a claim with the insurer to receive the coverage outlined in the insurance policy or to seek damages from the third party that caused the losses.
Subrogation in the insurance sector, especially among auto insurance policies, occurs when the insurance carrier takes on the financial burden of the insured as the result of an injury or accident payment and seeks repayment from the at-fault party.
Example of Subrogation
One example of subrogation is when an insured driver's car is totaled through the fault of another driver. The insurance carrier reimburses the covered driver under the terms of the policy and then pursues legal action against the driver at fault. If the carrier is successful, it must divide the amount recovered after expenses proportionately with the insured to repay any deductible paid by the insured.
Subrogation is not only relegated to auto insurers and auto policyholders. Another possibility of subrogation occurs within the health care sector. If, for example, a health insurance policyholder is injured in an accident and the insurer pays $20,000 to cover the medical bills, that same health insurance company is allowed to collect $20,000 from the at-fault party to reconcile the payment.
Subrogation Process for the Insured
Luckily for policyholders, the subrogation process is very passive for the victim of an accident from the fault of another party.
The subrogation process is meant to protect insured parties; the insurance companies of the two parties involved work to mediate and legally come to a conclusion over the payment.
Policyholders are simply covered by their insurance company and can act accordingly. It benefits the insured in that the at-fault party must make a payment during subrogation to the insurer, which helps keep the policyholder's insurance rates low.
In the case of an accident, it is still important to stay in communication with the insurance company. Make sure all accidents are reported to the insurer in a timely manner and let the insurer know if there should be any settlement or legal action. If a settlement occurs outside of the normal subrogation process between the two parties in a court of law, it is often legally impossible for the insurer to pursue subrogation against the at-fault party. This is due to the fact most settlements include a waiver of subrogation.
Benefits of Subrogation
In insurance, subrogation allows your insurer to recover the costs associated with a claim, such as medical bills, repairs costs, and your deductible, from the at-fault party's insurer (assuming you were not at-fault). This means that both you and your insurer can recoup the costs of damage or harm caused by somebody else.
It also means improved loss ratios and profits for your insurer.
Waivers of Subrogation
A waiver of subrogation is a contractual provision whereby an insured waives the right of their insurance carrier to seek redress or seek compensation for losses from a negligent third party. Typically, insurers charge an additional fee for this special policy endorsement. Many construction contracts and leases include a waiver of the subrogation clause.
Such provisions prevent one party’s insurance carrier from pursuing a claim against the other contractual party in an attempt to recover money paid by the insurance company to the insured or to a third party to resolve a covered claim. In other words, if subrogation is waived, the insurance company cannot "step into the client's shoes" once a claim has been settled and sue the other party to recoup their losses. Thus, if subrogation is waived, the insurer is exposed to greater risk.
EVALUATION: 1. Define subrogation and describe how it works
a. benefit of subrogation
b. waiver for subrogation
CLASSWORK: As in evaluation
CONCLUSION: The teacher commends the students positively