RIGHT OF RECOURSE AGAINST THE INSURED

The right of insurance companies to recover the amount of compensation they paid out under insurance policies from their policyholders is called "insurance subrogation." This legal concept is a mechanism used by insurance companies to mitigate their losses and recover compensation payments from the other party or parties at fault. Insurance subrogation is implemented within the framework of various legal principles and procedures and is a process that must be carried out in accordance with the rights of the policyholders.

Insurance subrogation refers to the right of insurance companies to recover the amount of compensation they paid to their insured after an accident from the other party or parties responsible for the damage. For example, in the case of a car accident, the insurance company can seek recourse from the other driver or drivers at fault, or other responsible parties, for the compensation paid to the car owner.

Insurance recourse rights are generally supported by provisions in insurance contracts or general principles of insurance law. Insurance companies can reclaim the amount of compensation they have paid to their policyholders, based on contract terms or legal regulations. This right is crucial for insurance companies to maintain their sustainability and financial soundness.

Insurance Subrogation Process and Practices

The insurance recourse process typically involves the following steps:

• Damage Assessment: The insurance company determines the damage suffered by its insured and pays compensation for that damage.
• Determining Fault: The party or parties at fault for causing the damage are identified.
• Submission of a Recourse Claim: The insurance company will file a recourse claim against the parties at fault for the damage and demand the return of the compensation paid.
• Legal Process: In cases where a recourse claim is opposed or a dispute arises, legal proceedings can be initiated and a case can be taken to court.

Exceptions under which an insurance company may seek recourse against its insured

• Non-compliance with Insurance Policy Terms: Failure to comply with the terms or conditions specified in the insurance policy may affect the insurance company's right of recourse. For example, if the insured fails to comply with the notification periods specified in the policy or violates certain conditions, the insurance company may file a recourse claim.
• Intentional or Gross Negligence: If the insured intentionally or grossly causes an accident, the insurance company may exercise its right of recourse. Such situations are generally based on the fault liability provisions specified in the insurance contract.
• Expenses Exceeding Insurance Compensation: The insurance company may reclaim expenses incurred by the insured that exceed the amount of compensation paid and are deemed unfair or unnecessary. For example, if the insured requests excessively high and unnecessary repair costs, the insurance company may seek reimbursement for these expenses.
• Another Insurance Policy or Third-Party Liability: If the insured event is covered by another insurance policy or if a third party is liable, the insurance company may seek recovery of the compensation paid from these other sources.
• Legal Processes and Court Decisions: In cases where, as a result of legal processes, it is determined that the insured was at fault and that this fault led to the payment of insurance compensation, the insurance company may exercise its right of recourse. According to court decisions, if the insured's liability is established, the insurance company may demand reimbursement from the insured for this amount.
• If the driver of the vehicle causing the decrease in value is unlicensed:

The insurance company may seek recourse if the incident giving rise to compensation occurred while the vehicle was being driven by a person who did not possess a valid driver's license according to the relevant legislation, or whose driver's certificate had expired, or whose license had been temporarily or permanently revoked, or if it resulted from a violation of traffic rules.

For example, if a driver whose license has been revoked for driving under the influence of alcohol/drugs is involved in an accident that causes a decrease in the vehicle's value during the probation process, the common view is that they will not be considered "driving without a license" and should not face the risk of recourse solely for this reason.

Damages occurring while the vehicle is being used by persons who have consumed drugs or alcohol above the legal limit (0.5 per mille), or by persons prohibited from consuming alcohol according to the relevant legislation, may be recovered from the insured by the insurance company after the damages have been covered by the insurance company.

If the vehicle was stolen or hijacked due to the insured's fault:

If the event giving rise to compensation is theft or hijacking of the vehicle, and it is determined that the insured or those for whom they are responsible were at fault in the theft or hijacking, the insurance company may seek recourse against the insured.

If the vehicle that caused the decrease in value was put into traffic in violation of the regulations:

If the event giving rise to compensation occurred due to the transportation of passengers in a vehicle not licensed for passenger transport, or the transportation of passengers or cargo exceeding the capacity limit determined by the competent authorities, or due to the ignition, combustion, or explosion of explosive, flammable, and dangerous materials in a vehicle not licensed for the transportation of such materials, the insurance company may seek recourse for the compensation it has paid to the insured.

The Situation in Which the Judgment of a Liability Case Forms the Basis for a Recourse Action

In claims for compensation related to diminished value, the plaintiff often asserts claims against more than one responsible party. This is the correct approach to ensure a successful collection process. In such claims, it is undeniable that the party causing the damage will be held liable for the actual damage in proportion to their degree of fault.

 

Supreme Court 17th Civil Chamber Decision: 2016/3878

-DECISION-

The attorney for defendant ... argued that they were the traffic insurer of the vehicle belonging to the other defendant ..., that they were liable for the damages only up to the policy limit and in proportion to the fault of their insured, and that the plaintiff's claim for advance interest in the enforcement proceedings was unfounded, thus defending the rejection of the case.
The attorneys for defendants ... and ... argued that the plaintiff's claim was time-barred, that the plaintiff should direct their claim for damages to the company that issued the compulsory motor vehicle insurance policy and the comprehensive insurance company, that the defendant driver was blameless in the accident, and that the claim was excessive, thus defending the rejection of the case.

The lawsuit concerns an insurer who made a payment to his insured under a comprehensive insurance policy, and claims that the amount paid was.. return This relates to the request for the annulment of the objection raised against the enforcement proceedings initiated for the purpose of debt collection.

The court ruled that the plaintiff recourse right by making a payment to the insured on the date of the accident that led to the birth recourse right The provision in Article B.4.4.3 of the Insurance and Social Security Law, which was in effect in 2012 when the plaintiff won the case, states that "The insurer legally takes the place of the insured to the extent of the compensation paid. The policyholder and the insured are obliged to provide the insurer with documents and information that are useful and obtainable in any lawsuit that the insurer may file," and the plaintiff also has a claim against the defendant vehicle owner and driver recourse right While the judgment should have been rendered taking into consideration the circumstances, the judgment rendered as written, based on a mistaken assessment, is deemed incorrect.

2- In light of the scope and form of the annulment order, it is deemed unnecessary to examine the other appeals of the plaintiff's attorney at this time.

CONCLUSION: For the reasons explained in paragraph (1) above, the appeal of the plaintiff’s attorney is ACCEPTED and the judgment is REVERSED; for the reasons explained in paragraph (2) above, there is no need to examine the other appeals of the plaintiff’s attorney at this time, and the advance fee is to be returned to the plaintiff who appealed upon request. This decision was made unanimously on 28/03/2016.

 

Law Student Intern

Behiye Zeynep Ozturk