Do You Have A Subrogated Right To Claim Interest?

The New South Wales Supreme Court recently held that an insurer who has made payment under an insurance policy is not entitled to claim interest from an insured in relation to that payment unless and until the insured receives full payment from the tortfeasor in respect of the damage suffered by the insured. The insured, however, is not entitled to claim interest from the tortfeasor in respect of loss that has been paid out under an insurance policy.

The plaintiffs were the owners of a property situated at Stanwell Tops. On 25 December 2001, a fire caused by the defendant swept across the plaintiffs' property causing damage. Liability was not in issue. The majority of the plaintiffs' property that was damaged in the fire was uninsured. The plaintiffs made a claim against the defendant for the full amount of the loss suffered, which included both insured an uninsured losses.