Subrogation Policy

Originally Adopted by MVRMA Board:  December 16, 1991
Amended by MVRMA Board:  June 15, 1992
                                                        June 16, 2008

Purpose

This policy has been established in order to clarify the manner in which subrogation claims will be managed by the Miami Valley Risk Management Association's Claims Manager in behalf of MVRMA member municipalities. A "subrogation claim" is defined as a loss against a member, which was caused by the negligent act of a third-party.

Policy Statement

Effective with the adoption of this policy, it shall be the policy of the Miami Valley Risk Management Association to direct the MVRMA Claims Manager to facilitate the collection of damages caused by the negligent act(s) of third-parties in behalf of MVRMA members. However, claims eligible for subrogation shall not be reimbursed to members from any MVRMA loss fund, unless subrogation efforts fail to make the member municipality whole. Then, only the unrecoverable amount shall be paid by MVRMA.

Subrogation losses, with the sole exception of situations where full recovery from a third-party becomes impossible, shall not be counted as losses against member municipalities in calculating four-year average annual loss figures. In these rare instances, only the amount paid out of a MVRMA loss fund shall be counted as loss experience against the member.

Thus, as a standard practice, the member municipality shall report each claim to the Claims Manager in accordance with the MVRMA Claims Reporting Procedure. When a claim is appropriately subrogated against a third-party, the Claims Manager shall direct the member municipality to pay for repairs to (or for the replacement of) their damaged property, and to await reimbursement from the negligent third-party (and/or their insurer) which caused the damage.

If the MVRMA Claims Manager is unable to recover in behalf of the member City, the Claims Manager shall so notify the City. The Claims Manager, in consultation with the member City and the MVRMA Executive Director, may than assign the claim to legal counsel for litigation. At this juncture, the member City incurring the claim may request that the Association reimburse its loss. If the City chooses to have its loss reimbursed, the claim shall be treated like any other insured loss, subject to member deductibles and counted as part of the member's loss history. These costs shall include the additional costs of litigation. The City may, alternatively, choose to await the final outcome of litigation to avoid incurring the full loss as part of its loss history.