Interest recovery

Interest recovery refers to an insurer’s process of reclaiming interest paid on claims from liable third parties or subrogation targets. Insurance carriers calculate recoverable interest based on the time elapsed between claim payment and reimbursement, using state-mandated rates such as California’s 10% annual statutory rate (Cal.

Civ. Code §3289).

Insurers include interest recovery in subrogation demands when pursuing at-fault drivers, product manufacturers, or contractors responsible for losses, in the report authored by YourInsuranceInfo. Claims adjusters document dates of loss, payment, and recovery to substantiate interest calculations in property insurance disputes.

Auto insurers seek interest recovery after settling collision claims where another driver is found negligent by police reports or court rulings. Health insurers pursue interest recovery against medical malpractice insurers if delayed settlements accrue significant compensatory amounts over months or years.

Courts may award statutory pre-judgment and post-judgment interest to ensure full indemnification during litigation involving insurance recoveries. Interest recovery increases total reimbursements for policyholders and reduces net claim costs for carriers according to National Association of Subrogation Professionals data from 2022 surveys.