Claims handling, liability assessment and subrogation
What the exam tests
Claims process and liability: investigating, reserving, settling, recovering and deciding who was at fault in tort and under the Road Traffic Act.
Core rules
- Claims journey: notification, FNOL, verification of cover, reserving, investigation, liability decision, repair or total loss, salvage, third-party settlement, subrogation and recovery.
- Liability in road accidents is based on negligence: duty, breach, damage and causation. The Highway Code informs but does not decide liability.
- The RTA imposes liability on the user; insurers may satisfy judgments under s151. Contributory negligence reduces damages; joint tortfeasors contribute.
- Subrogation puts the insurer in the insured's shoes after indemnifying; recovery cannot exceed the amount paid. The insured must cooperate and preserve evidence.
Worked example
A rear-end collision: the following driver is presumed at fault. Dashcam footage shows the lead driver brake-checked without reason. Liability might be apportioned, say 70/30, reducing the third-party recovery. The insurer pays its insured's own damage less excess, then pursues the other driver for the recoverable proportion, not the full amount.
Traps
Subrogation is not a separate policy benefit and does not let the insurer profit. Do not overlook uninsured losses such as the excess, which the insured may recover separately. Credit hire and personal injury need separate handling. Liability admissions by the insured can prejudice recovery. Reserve adequately.