What is subrogation in motor insurance claims?
In the context of Singapore, under the Barometer of Liability(BOLA) system, a subrogation claim is a claim made against the first party by the third party for the first party part in the accident.
For example, Mr A was riding a motorbike in 2008 when a saloon car knocked into him from behind. Mr A suffered some minor injuries and damages to his bike. The accident was prompted reported and left to the respective insurers of both parties to sort out the claims.
Mr A was very sure that he was not at fault and the incident was forgotten. However unknown to Mr. A, although his NCD was not affected, the insurers accorded him a 10% liability in the accident and the saloon car driver 90%. The saloon car insurer, A company then made a subrogation claim against Mr. A insurer, I company. As his liability is only 10%, his NCD was not affected according to BOLA agreement but Mr A will get a claim history of 10% of the damage bill. This will affect him for the subsequent 3 years even if he sold his bike and buy a saloon car.
