What is the term for the action an insurer takes to claim money it has paid to its insured from another insurer in Spain?

Question from tito, What is the term for the action an insurer takes to claim money it has paid to its insured from another insurer in Spain?

Answer from AI:

In Spain, the action that an insurer takes to claim money it has paid to its insured from another insurer is known as subrogation (subrogación in Spanish). This is a legal right that allows an insurer to recover the amount of the claim it has paid to its insured from a third party that caused the loss.

Understanding Subrogation

Subrogation is a common practice in the insurance industry. It is based on the principle that the party who caused the loss should ultimately bear the cost. When an insurer pays a claim, it steps into the shoes of its insured and can seek recovery from the party at fault or their insurer.

Legal Basis for Subrogation

The right of subrogation is established in the Spanish Insurance Contract Act (Ley 50/1980, de 8 de octubre, Contrato de Seguro). Article 43 of this Act states that the insurer, once it has paid the compensation, may exercise the rights and actions that corresponded to the insured against the persons responsible for the loss, up to the limit of the compensation.

When to Seek Legal Advice

While the concept of subrogation is relatively straightforward, its application can be complex. It may involve negotiations with the other insurer, and in some cases, legal proceedings may be necessary. Therefore, it is recommended to consult with a legal professional for personalized advice.

Steps in a Subrogation Process

The typical steps in a subrogation process might include:

• The insurer pays the claim to the insured.
• The insurer identifies the party at fault and their insurer.
• The insurer notifies the other insurer of its intent to subrogate.
• The insurers negotiate the amount to be recovered.
• If an agreement cannot be reached, the insurer may initiate legal proceedings.

Please note that this is a general explanation and the actual process may vary depending on the specifics of the case. For more information, you can refer to the Spanish Insurance Contract Act.