Definition : Insurance - Subrogation

Legal mechanism allowing the insurer, who has paid an insurance indemnity, to turn against the third party responsible for the damage up to the amount of this compensation. The insurer can thus avail itself of all the rights and remedies of the insured. Some people are protected from the recourse of the insurer who paid an insurance indemnity, such as people usually living in the insured's home.

 WHAT YOU SHOULD KNOWIn divided co-ownership, an insurer may not be subrogated in the rights of a syndicate of co-owners, against one of its co-owners, a person who is a member of a co-owner’s household or a person in respect of whom the syndicate is required to enter into an insurance contract to cover the person’s liability (1075.1 of the Civil Code of Quebec). Thus, the insurer has no recourse against the child of a co-owner who would be responsible for a fire that generated damage to the building. An exception to this rule applies in the case of bodily or moral injury or if the injury is due to an intentional or gross fault.

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The Law and the overwhelming majority of declarations of co-ownership require that syndicates of co-owners insure their building. This may seem surprising at first glance as the syndicate does not own the private portions nor the common portions. However, its main object is to ensure the preservation and the longevity of the building and to manage and administer it diligently following rules of the trade. This is why the legislator has given to the syndicate an insurable interest and has made it compulsory that it subscribe building insurance.  
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