Recovery From Third Party Tortfeasors
When an insurer has paid an insured the benefits specified in the insurance contract, there are several possible approaches to determining the priority between the interests of the insurer and the insured in regard to any recovery that results from the insured’s claim against a third party alleged to be responsible for the loss. One of the following three rules or approaches will almost always be applied: “The insurer is to be reimbursed first out of the recovery from the third party for the full amount of the insurance benefits paid to the insured, and the insured is then entitled to any remaining balance.”
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