Should I settle before my insurer pays?

Subrogation lets an indemnifying insurer use the insured’s recovery rights against a responsible third party, to the extent of its payment. A proposed release therefore deserves review before signature, even while your claim is awaiting a decision. The IA notes distinguish rights arising after indemnification at common law from non-marine policy terms that may allow their exercise before payment. Send the actual offer and release to the insurer and ask whether its consent or changes to the wording are needed. [C1]

For indemnity cover, the aim is compensation for loss rather than profit from being paid twice for that loss. Tell the insurer about money already received and explain what it covers. Ask for a written reconciliation identifying the insured loss and other amounts; do not assume that every payment has the same purpose or automatically calculate a deduction yourself. [C1]

The IA notes distinguish indemnity from life insurance: a fixed life benefit is generally not compensation measured by an actual financial loss, so the ordinary indemnity-based subrogation rule does not apply in the same way. Do not extend that answer to every medical or accident rider attached to a life policy. Ask which benefit is being paid and how its wording works. [C2]

Ask whether the document releases only the identified loss or wider claims, and how it treats uninsured losses and the insurer’s potential recovery. Give the lawyer the policy and insurer’s response together. If you have already signed or received money, disclose that promptly and obtain advice on the actual effect. This guide does not decide that your insurance claim is automatically lost or that a release can be undone. [C1, C2]

Does waiting for payment make a release harmless?

No assumption is safe; ask for review before signing. [C1]

What is subrogation?

It is the insurer exercising recovery rights associated with an indemnified loss. [C1]

Can the same indemnified loss be paid twice?

Indemnity-based subrogation is intended to prevent that result. [C1]

Should I disclose compensation already received?

Yes. Ask the insurer how it affects the loss calculation. [C1]

Are fixed life benefits treated identically?

No. The IA distinguishes life benefits from indemnity payments. [C2]

Is every rider outside subrogation?

Do not assume so; identify the benefit and its terms. [C2]

Can this guide approve my settlement wording?

No. Obtain insurer input and legal advice on the actual document. [C1]

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We provide information and referrals to a licensed Hong Kong broker; regulated advice and arrangements belong with that broker. Mainland visitors must sign in Hong Kong. Do not send identity, tax or medical documents through the general enquiry form. [C3]

General information, not advice.