Opinion ID: 1953826
Heading Depth: 1
Heading Rank: 6

Heading: Subrogation and Insurance.

Text: In the context of insurance, the right of subrogation is based on two premises: (1) an insured should not be allowed to recover twice for the same loss, which would be the result if the insured recovers both from the insured's insurer and the tort-feasor, and (2) a wrongdoer should reimburse an insurer for payments that the insurer has made to its insured. See, Shelter Mut. Ins. Co. v. Bough, 310 Ark. 21, 834 S.W.2d 637 (1992); Powell v. Blue Cross and Blue Shield, 581 So.2d 772 (Ala.1990); Rimes v. State Farm Mut. Auto. Ins. Co., supra ; Ortiz v. Great Southern Fire & Cas. Ins. Co., 597 S.W.2d 342 (Tex.1980); Wimberly v. Am. Cas. Co. of Reading, Pa., 584 S.W.2d 200 (Tenn.1979); Skauge v. Mountain States Tel. & Tel., supra ; Oss v. United Services Auto. Ass'n, 807 F.2d 457 (5th Cir.1987). See, also, 16 George J. Couch, Cyclopedia of Insurance Law § 61:18 (rev. ed. 1983). As observed in Oss v. United Services Auto. Ass'n , subrogation clauses should be construed to confirm, but not expand, the equitable subrogation rights of insurers. 807 F.2d at 460 (citing 4 George E. Palmer, The Law of Restitution § 23.14 (1978)). Moreover, subrogation is in its nature equitable.... [T]he insurance contract setting up and declaring the rights between the parties preserves the unity and control of the insured over his cause of action for personal injury and property damage against the tort-feasor, and yet fully protects the insurer's subrogation right. Krause v. State Farm Mut. Auto. Ins. Co., 184 Neb. 588, 592-93, 169 N.W.2d 601, 604 (1969). Thus, an insurance policy reaffirms the rights of parties relative to subrogation but, in the absence of an express provision to the contrary, does not alter fundamental principles pertaining to subrogation. Although Shelter's subrogation right arises under its insurance policy issued to Tipton, the exact nature and extent of Shelter's subrogation right is determined by the circumstances of Frohlich's settlement and the resulting equities.