SUBROGATION, CONTRIBUTION AND REINSTATEMENT

SUBROGATION

THE DOCTRINE

(a) Two limbs

The doctrine of subrogation has two limbs. The first is that the insurer is entitled to “stand in the shoes” of its insured and to enforce any claims possessed by the insured against third parties which will have the effect of diminishing the loss insured, i.e. effectively standing in its shoes and acting as the insured. The second is that the insurer is entitled to recover from the insured any benefits received by him from a third party in diminution of the loss (but only strictly in accordance with and to the extent of the insurer’s interest).