Insured Not Entitled to Sue for “Loss of Resale Value” of Repaired Auto

At the end of a subrogation trial, the judge instructs the jury that the subrogating carrier is entitled to the lesser of: (a) the cost to repair, or (b) the loss in market value of property damaged in a loss. [1]   The value of property at the time of a loss is known as its “actual cash value” or ACV.  The ACV is typically calculated by estimating the cost to replace the item, then subtracting depreciation.  Many times the insured is paid an extra amount (replacement cost, or “RC”) if they actually rebuild their house or replace contents.  However, RC payments are typically not recoverable in subrogation.  Whereas ACV payments restore the insured to the condition he/she was in just prior to the loss, RC payments actually put the insured in a better condition than they had been in.  For example, suppose a fire destroys my eight-year old television.  At the time of the fire, my TV was only worth $100.   Because my policy has RC coverage, I buy a nice, new flat-screen TV valued at $800.  My life is actually better because I have a brand new TV, not an eight-year old one.   If my carrier pursues subrogation, the carrier can only seek to recover the $100 ACV value of the TV, not the $800 replacement cost.

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Court Rules on Venue in a Subrogation Action

The word “venue” refers to the location (county) in which a lawsuit will be heard and in which the trial will occur (if it proceeds all the way to trial).  The plaintiff (i.e., the one filing the lawsuit) initially chooses the venue when he/she files a “Summons and Complaint” with the court clerk at one of New York’s 62 counties.  The venue chosen must be “proper” and the defendant (i.e., the one responding to the lawsuit) can object if she/he feels the plaintiff did not file the lawsuit in the correct county – or if the county chosen is not convenient to the witnesses.  Generally, the venue is based on the “residency” of the plaintiff or the defendant.  If the plaintiff is a corporation – such as a subrogating insurance company – and the defendant “resides” in a county different than the plaintiff, the issue of which venue if most appropriate gets a bit more complicated, as demonstrated by a New York City judge earlier this month.

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NYS Legislature Passes Legislation Limiting Health Insurer Subrogation

Before leaving Albany June 21, both houses of the New York State Legislature passed legislation that would eliminate the ability of health insurers to pursue subrogation recovery by asserting a lien or otherwise claiming proceeds of a personal injury or wrongful death settlement.  The legislation is limited to health insurers and does not affect the ability of property insurers or others to recover.

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