If an insurer pays out compensation, in certain cases it can recover the amount from the actual liable party. This is called the right of recourse. A classic example is a traffic accident where the victim's insurer recovers the costs from the insurer of the other party at fault.
The right of recourse ensures that damages are compensated without the insured having to wait a long time. At the same time, it prevents the costs from ultimately sticking to the wrong party. In some cases, an insurer can even recover the amount from the insured himself, for instance if there was gross negligence or a violation of the policy conditions.
Disclaimer
This page is part of a lexicon and does not provide product information or contractual details on insurance services. For specific information, please refer to the official documentation or contact your insurance agent.
