Subrogation is a topic that at first glance may not be of much interest to a reader/insured person, since both the title of this capsule and the legal concept of this legal figure do not seem to concern him or her. Nothing could be further from the truth.
To define in a simple manner what is to be understood by subrogation, we refer to the dictionary of the Royal Spanish Academy, which states that it is the “Action or effect of subrogating”. This last concept, in turn, is defined by this same dictionary, as “To substitute or put someone or something in place of another person or thing.”
When studying the subject of obligations at law school, and especially the manner of extinguishing them, among which we can mention, payment, compensation, novation and other figures; subrogation occupies an important place.
Subrogation in the insurance contract
In commercial matters and especially in the field of insurance contract, subrogation plays an important role, since the insured'scompliance or non-compliance will depend on the insurer's determination of whether to pay its claim.
Thus, and in accordance with the provisions of Article 1021 of the Code of Commerce, “The insurers that have paid in whole or in part the loss or damage of the insured goods, are subrogated in the rights that the insured may have against third parties responsible for the loss.”
The foregoing only confirms what the doctrine and the Civil Code in matters of obligations also state. When the DRAE defined the word subrogate, it referred to the substitution of someone or something. Let us see how this operates in insurance.
Let us imagine that you are the subject of a collision, in which the responsibility for the accident has been determined and fixed by the authorities in the other driver. If you did not have insurance (this is only an assumption since in Panama every driver is required to have the SOAT) only assuming it for the purposes of this example, you would of course resort against the person who caused the damages so that he/she pays for them.
Now, following the same example, but with the difference that now you do have insurance, but the one who collided with you does not, then, most likely, after the payment of the deductible agreed in your policy, you will ask your insurer to take care of the repair costs of your vehicle.
Once the payment has been made by your insurer or concurrently with it, you must sign a settlement in which you release the company from any additional claim or liability resulting from the damage to your vehicle and in which you subrogate all the rights that you would have had against the party responsible for the collision. This is precisely what subrogation is. You, who could have decided to recover the damage caused to your car directly from the person who caused it, by turning to your insurer and having it pay for your damage on behalf of the driver responsible for the collision, vest in the insurance company your rights against the guilty party.
Subrogation is an almost sacred right that every insurer has, for it to be “...subrogated in the rights that the insured may have against person responsible for the loss”.
Por la razón anterior, todo asegurado debe cuidar y preservar en favor del the insurer the before-mentioned right of subrogation, because otherwise the insurer could legally refuse to pay the claim. As you may have seen, the title and object of the present capsule has a great incidence in the behavior of the insured, and it is not only limited to automobile insurance but to all other insurance as well.
EN 
ES