A judgment against the insured for damages in a vehicular accident gives rise to the insurer's right to reimbursement. The Supreme Court upheld an insurer's right to recover what it paid from the person responsible for the accident.
“Insurance may cover the loss, but the person at fault remains answerable for the damage caused.”
— Hernando, J.
The Facts
A vehicular accident occurred on November 6, 2014, along the National Highway of Barangay Urayong, Bauang, La Union, involving a Honda CR-V and a Toyota Innova. The insurer of the CR-V paid the property damage claim of its insured and later filed a complaint for recovery against the driver and the registered owner of the Innova.
What Did the Supreme Court Decide?
The Supreme Court upheld the insurer's right to recover the amount it paid to its insured based on quasi-delict. The insurer, having indemnified its insured under the insurance policy, may seek reimbursement from the person responsible for the accident.
In Simple Terms
If your insurer pays for damage someone else caused, the insurer can collect that amount from the person at fault.
Why Is This Important?
Insurance is a contract of indemnity. When the insurer pays for damages caused by the fault of another, it is subrogated to the rights of its insured and may recover the amount it paid from the person at fault under Articles 2176 and 2207 of the Civil Code.
Practical Takeaway
A driver or vehicle owner found liable for a vehicular accident can be required to reimburse the insurer for the amounts the latter paid to its insured. Insurance provides financial protection to the insured, but it does not eliminate the liability of the person at fault.
Case Citation
Mark Erquiza Laza and Danilo C. Agpoon v. Standard Insurance Co., Inc.
G.R. No. 279772
June 29, 2026
First Division
Hernando, J.
How TLG Can Help
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