"Subrogation" is frequently applied in theft insurance.
Hexun.com: A while ago, there was a lot of media buzz about the "no-fault no-compensation" issue in vehicle damage insurance. Can the two experts explain what exactly this "no-fault no-compensation" in vehicle damage insurance means?
Li Feng: Actually, this is also a misinterpretation of the terms of vehicle damage insurance. The entire vehicle damage insurance consists of multiple clauses, including commercial third-party liability insurance, vehicle damage insurance, theft insurance, and a series of other types of insurance. If you are not at fault in an accident, it should be compensated by the opposing party's commercial third-party liability insurance, so there is no need to use your own vehicle damage insurance; it does not fall within the scope of coverage that vehicle damage insurance should involve. Therefore, such risks are not included in the vehicle damage insurance policy. According to the different proportions of responsibility in the accident, vehicle damage insurance compensates according to different proportions. For example, if the owner has no responsibility in the accident, the opposing party should bear 100% of the loss. If the owner bears half the responsibility in the accident, then his own vehicle damage insurance will compensate for half, and the opposing party's commercial third-party liability insurance will compensate for the remaining 50%. Since insurance has been purchased, the car owner does not have to pay out of pocket; the insurance companies on both sides can jointly compensate for the loss. Of course, if the opposing party has no insurance, then the opposing party will have to pay out of pocket.
Hexun.com: For example, if I am not at fault in a traffic accident, I can also ask my insurance company or request my insurance company to help me with "subrogation." Could the two experts introduce the concept of "subrogation"?
Li Feng: "Subrogation" is already stipulated in the Insurance Law. For example, if the insured under the vehicle damage insurance suffers a loss but does not want to directly seek compensation from the responsible party due to various reasons, they can make a claim to their own insurance company. The insurance company will first compensate them, and thereby obtain the right to "subrogation." This means the right is transferred to the insurance company, which will then directly pursue the responsible party for compensation.
Hexun.com: So-called "subrogation" is now a right granted to the insured by the Insurance Law. Due to the continuation of previous practices, some customers may not fully accept it yet. Personally, I think that in this regard, including future innovations and changes in auto insurance products, we could learn from American practices. In their auto insurance content, it clearly specifies no mutual subrogation after collisions; each party just finds their own insurance company. This brings convenience to every consumer of auto insurance. I think when revising industry clauses further, consideration should be given to how disputes between both parties can be reduced.
For a long time, the most thorough and best execution of "subrogation" has been in the theft insurance component of auto insurance: as long as 60 days have passed since the car was lost, up to 360 days, one can go directly to the insurance company to handle procedures and receive compensation without any dispute.
Li Feng: Because "subrogation" is a right that the insurance company can exercise, not all cases will result in "subrogation." This is a matter of negotiation between the insured and the insurance company. First, the insured must apply to the insurance company requesting that they exercise this right. Generally speaking, the insurance company will not actively exercise this right unless there are disputes or other issues between the responsible party and the victim regarding compensation, in which case the intervention of the insurance company might be necessary. Usually, the insurance company will simply compensate directly, but different insurance companies may have different practices.
It should be noted that in the Insurance Law, if the victim waives their right to seek compensation from the responsible party, then the insurance company cannot exercise its "subrogation" rights. Different insurance companies may interpret this differently.
How can it be proven that the victim has not waived their right to seek compensation? Some companies may consider the application complete if the customer provides sufficient materials such as proof of the accident and information about the responsible party, allowing the insurance company to exercise "subrogation." Other companies, based on their understanding of the Insurance Law, may require proof that the victim has not waived their right to seek compensation from the responsible party, hence requiring the insured to initiate legal proceedings.
Zhang Xiaohong: That is, one needs to go to court and get a case filing notice, proving that you haven't waived your right. Practices among companies may indeed vary. But we can see the reason: if all events were subject to "subrogation," the distinction between vehicle damage insurance and third-party liability insurance would become blurred, making it unnecessary to differentiate between the responsibilities covered by these two insurances.
Li Feng: As Zhang mentioned earlier, internationally more advanced practices include each party seeking compensation from their respective insurance companies after a collision. However, in our country, there is a hindering factor: our insurance penetration rate is relatively low. Our vehicle damage insurance penetration rate is probably around 50% to 60%. In foreign countries, where everyone is insured and has their own insurance company, someone will always compensate for their losses. In our country, if an accident occurs and one party has insurance while the other does not, if the uninsured party is not at fault and each party seeks compensation from their respective insurance companies, then the non-at-fault party will have no one to cover their losses, which is unfair. If the penetration rate of commercial insurance increases and becomes widespread, I believe such measures could be implemented.
Hexun.com: Sometimes disputes occur because car owners are not sufficiently familiar with certain insurance clauses beforehand. Can the two experts introduce some things car owners should pay attention to during the insurance purchase process?
Li Feng: Nowadays, many car owners are accustomed to very simple and convenient insurance purchases. When buying a car, the 4S store or dealership handles everything for you, providing a one-stop service, leaving you with nothing to worry about. After returning home, the insurance policy might be placed somewhere unknown, possibly never even looked at. When purchasing other goods, even those costing a few hundred yuan, we would try to understand the product's performance. Yet, for auto insurance, which costs thousands of yuan and can reach tens of thousands for luxury cars, people do not carefully read the terms. This might be because spending a large sum on the car makes the several thousand yuan for insurance seem insignificant, but actually, auto insurance is a considerable expense.
In order to protect our own rights and interests, it is important to understand before purchasing insurance. Ask the agency which types of insurance they offer, the coverage range of each type, especially the situations where compensation is not provided. During the insurance purchase process, the insurance company has the obligation to clearly explain the terms, especially the exempted liabilities clause.
Due to the habit of clients wanting a quick and convenient insurance purchase process, the interaction between insurance companies and clients is often limited. To address this, insurance companies now highlight the parts related to exemptions in the policy using bold or prominent fonts. If clients don't have time to visit the insurance company for consultation, they should spend a little time reviewing the exemption section of the insurance terms; or, before purchasing, ask the company for a copy of the terms to ensure they meet your requirements. If doubts arise, choose a product that better suits your needs.