What type of insurance policy has no subrogation rights?

A benefit policy is designed to provide a specified benefit upon the occurrence of a particular event, without consideration for the actual loss incurred. In this type of policy, the insurer pays a predetermined amount, often related to life insurance or critical illness cover, regardless of the total loss suffered by the policyholder.

Subrogation rights allow an insurer to pursue a third party that caused an insurance loss to recover what is owed to them for that loss after they have compensated the insured party. Since benefit policies do not aim to indemnify a loss but rather provide a specified benefit, subrogation rights are not applicable. The nature of these policies does not involve a reimbursement process that would necessitate the insurer recovering costs from a third party, which is why benefit policies will have no subrogation rights.

In contrast, indemnity policies, motor insurance, and household insurance typically revolve around compensating for actual losses incurred, which involves a method for the insurer to seek recovery from at-fault parties, thereby invoking subrogation rights.