Insurance Subrogation

Henning said:
The 'No Subro clause' used to be typical in every FBO policy, not so anymore,
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...probably because it costs extra. One supposes the FBO could just pass the cost through to the renter in the form of higher rental rates, but that has marketing and competition issues.
 
Tummler said:
A renter's policy is a good idea, but it may not eliminate the possibility of being sued by your FBO's insurer, which for some is an incredibly unpleasant experience even without the possibility of personal liability.
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Won't eliminate the possibility, but it will pay for your legal defense, and that alone may be worth the cost.
 
Tummler said:
I no longer have access to the research I did on this issue, but what I found in every jurisdiction I looked at was the duty to cooperate with respect to preserving the insurer's subrogation rights does not arise until after there is an occurrence. If an FBO was going to do this for their renters, it would be a good idea to do what someone upthread said their FBO does, which is charge nominal amount for the waiver.

If you are dealing with this particular issue, I can see if I can get a copy of my research.
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It is true as a general principle that insurers relying on equitable subrogation may be stuck with an advance waiver. I'm familiar with those cases.

The question I have is whether insurers, knowing that, are smart enough to include contractual provisions allowing the insurer to deny coverage to or recoup payments made from the insured in the event the insured waives any rights to claim damages against a third party.

Of course, the other question is whether, practically speaking, it works only once when the insurer wants to subrogate and finds it can't.
 
midlifeflyer said:
The question I have is whether insurers, knowing that, are smart enough to include contractual provisions allowing the insurer to deny coverage to or recoup payments made from the insured in the event the insured waives any rights to claim damages against a third party.
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I have never seen anything in the standard policy forms that would make indemnification conditional on not entering into a pre-occurrence waiver, but that does not mean it does not exist. All of the contractual subrogration provisions I have scene simply provide that the insured has a duty to cooperate with any subrogration claim, which basically operates the same as the duty to cooperate in the defense of a claim.

With respect to you point about being dropped by the carrier after a claim where they cannot seek subrogation, I suppose that's a possibility, but I am seeing more and more insurers drop insureds after decent sized claim as a matter of course, so I don't know to what extent this consideration should factor into one's calculations.
 
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Ron Levy said:
...probably because it costs extra. One supposes the FBO could just pass the cost through to the renter in the form of higher rental rates, but that has marketing and competition issues.
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Yeah, it's kinda like airlines advertising a fare and then you end up paying an extra $50 to take your luggage.
 
Papa Foxtrot said:
This is simply not the case. I'm not saying it hasn't happened as insurance companies do stupid s**t all the time. The insurer doesn't get to determine liability - that's the court's job. The insurer has a "duty to defend".
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Well, you would think so. This is an active case I am peripherally involved in where this happened. Plane got wiped out by a storm while parked. Renters insurance says 'not our problem because renter didn't cause the storm', FBO says 'act of god' and the owner is left chasing both around for the value of the plane.
 
weilke said:
Well, you would think so. This is an active case I am peripherally involved in where this happened. Plane got wiped out by a storm while parked. Renters insurance says 'not our problem because renter didn't cause the storm', FBO says 'act of god' and the owner is left chasing both around for the value of the plane.
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Why doesn't he turn it in to his insurance? Storm damage is a covered risk in aircraft policies. There are no 'Acts of God' exclusions I am aware of, only 'Acts of War' and liability from Acts of Terrorism.
 
Tummler said:
I have never seen anything in the standard policy forms that would make indemnification conditional on not entering into a pre-occurrence waiver, but that does not mean it does not exist. All of the contractual subrogration provisions I have scene simply provide that the insured has a duty to cooperate with any subrogration claim, which basically operates the same as the duty to cooperate in the defense of a claim.

With respect to you point about being dropped by the carrier after a claim where they cannot seek subrogation, I suppose that's a possibility, but I am seeing more and more insurers drop insureds after decent sized claim as a matter of course, so I don't know to what extent this consideration should factor into one's calculations.
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I recall one claim in my career where our insured waived liability verbally after a loss had ocurred. Basically told the contractor, "Don't worry about it." Net effect was the same, we paid the claim and didn't pursue any recovery. We also met with our customer and said, "Please don't do that again..."

However, I'm in a different marketplace; large commercial property where premiums run into the $$millions. Relationships are a big part of the buying decision, so we don't take an adverse position unless it's a really bad scenario. In the personal/small business market where both the customer and insurer tend to be commodities, it may be markedly different...

I know that it may sound self-serving since I work in the industry, but I would much rather have my own insurance coverage than depend on any sort of hold-harmless agreement.

BTW, all these opinions are my own. In do way to I intend to speak for my employer.
 
Get renters insurance,ask the FBO who pays the deductible after a claim is filed.could turn out to be a good amount.
 
Papa Foxtrot said:
I recall one claim in my career where our insured waived liability verbally after a loss had ocurred. Basically told the contractor, "Don't worry about it." Net effect was the same, we paid the claim and didn't pursue any recovery. We also met with our customer and said, "Please don't do that again..."

However, I'm in a different marketplace; large commercial property where premiums run into the $$millions. Relationships are a big part of the buying decision, so we don't take an adverse position unless it's a really bad scenario. In the personal/small business market where both the customer and insurer tend to be commodities, it may be markedly different...

I know that it may sound self-serving since I work in the industry, but I would much rather have my own insurance coverage than depend on any sort of hold-harmless agreement.

BTW, all these opinions are my own. In do way to I intend to speak for my employer.
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The case where I learned all the details about subrogation involved an insured who had an indemnification agreement with a third-party covering the loss doing all sorts of incredibly shady things to avoid seeking indemnification. It did not turn out well for the insured.

The relationship you described with respect to large commercial customers and their insurers used to be how most insurers handled all of their insureds, but that is changing, and it is changing fast. There are still a couple of old school carriers that conduct themselves in that manner with personal and small business insureds, but they are expensive, and most people I steer their way are shocked when they receive a quote from one of them.

With respect to a waiver or insurance statement, I wouldn't consider it as an either/or proposition. Furthermore, I was approaching this issue more from the angle of an FBO wanting to do right by their renters.
 
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