Subrogation is the transfer of legal rights of an insured against third party, to the insurer, when the loss or damage to the vehicle is caused by the negligence of any other person.
Proximate cause is an active and efficient cause that sets in motion a train of events, which brings about a result without the intervention of any force started and working actively from a new and independent source.
Section 146 of the of 1988 Act provides that no person shall use (except as a passenger), or allow any other person to use, a motor vehicle in a public place, unless the vehicle is covered by a policy of insurance complying with the requirements of the current MV Act 1988.
Any place or stand at which passengers are picked up or set down by a stage carriage is a public place.
All motor policies, therefore, contain a clause called ?Avoidance of certain terms and right of recovery? reading as under: "Nothing in this policy or any endorsement hereon shall affect the right of any person to recover an amount under or by virtue of the provision of the Motor Vehicles Act. But the insured shall repay to the Company all sums paid by the Company, which the Company would not have been liable to pay but for the said provisions.
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