Countless brokers and insurers have put their own stamp on solution to subrogation, but all so far rely on both the customer and the garage insuring with them. In many cases, this works perfectly well for both parties, but rarely does the policy for the car collector provide the wide ranging benefits you'd expect to find within a specialist collectors' car policy.

With this in mind, let's take a closer look at subrogation – what it means, why it's important and the impact it has.

As a specialist classic and performance car broker, we at Lockton Performance believe in the importance of making your insurance cover simple. In that vein, we don't think policyholders should need to become entangled in discussions relating to their own insurance cover, or indeed that of the business entrusted with their pride and joy (or joys!). So why does this happen and what can be done to relieve it?

To unpick this, we need to start by explaining what the responsibilities are for a classic car business or indeed any motor trader and how this relates to you. Bear with us; we'll try to keep the legal and insurance terminology to a minimum.

When you entrust your vehicle to a business for any reason, be it mechanical work, routine servicing, storage or even for sale, the business becomes immediately responsible for its safekeeping at common law. This can't be waived or modified, irrespective of what anybody might tell you.

If something goes wrong while the car is in the care of that business and they can be proved to have failed in their duty of care, they will become responsible for any loss or damage. Most reputable companies do their utmost to avoid this ever happening as they understand that not only are many cars extremely hard to replace, but that any incident is potentially harmful to their reputation.

While the business is responsible for your car's safekeeping, this does not mean that they are automatically liable for anything that happens. In order for the business to be responsible for damages, negligence has to be proved to demonstrate that they have failed in their duty of care.

The motor trader needs to make sure that they have sufficient insurance cover to protect their business should something go wrong.

Your own policy will include a clause effectively stating that once your insurer has paid your claim, they assume all rights to recover those losses from whoever can be proved to be responsible for the loss. This is an automatic process which is triggered when the claim is settled – although in reality, by the time your insurer has paid you, they will have established the circumstances of the loss and therefore be in a position to judge whether they believe that another party's actions have led to the damage.

This is at the centre of the discussion; if the business mentions insurance, your natural and understandable reaction will be “but I'm insured already”. The above points should help to explain that this isn't dual insurance but two entirely separate parties insuring an asset which either belongs to them (you, as owner of the car) or for which they have assumed responsibility (motor trader as custodian).

So, what is the solution?

You can engage with your own insurer and ask them to remove their right to recover. This process is termed 'subrogation' and has been at the centre of many a discussion between the classic motor trade, their clients and various insurers and brokers over the last 30 or so years.

In reality, many insurers will either refuse this request outright or partially agree to it, with a caveat that if the custodian has acted negligently, their right to recover remains in force. This actually changes nothing as the only circumstances in which they can recover anything is if the custodian can be proved to be negligent – so in reality this is something of a red herring.

Lockton's collector car policies include a clause which limits the amount your insurer will recover to £3,000,000. This means that the motor trader needs only insure your vehicle(s) for up to this amount, although their facilities must be approved by Lockton in advance. This will help simplify any discussions surrounding insurance between you and the company involved with your car.

As previously mentioned, the other alternative is for both parties to insure with the same insurer – this removes the recovery aspect completely but few insurers can provide both a comprehensive policy for the car collector and a similarly broad cover for the motor trader.

Crucially, our policies for you as the owner of a car or collection will include various benefits which many other policies don't, or can't, include.

Of course, the company with whom you place your car could chose to carry no insurance cover at all – this isn't something we'd recommend at all so we won't add any more detail!

Likewise, some companies will seek to limit their liability to a fixed sum by contract. Whilst this will stand at Law, it remains a fact that the common law duty of care simply cannot be waived, removed or amended, so your insurer will remain free to pursue the custodian for any sum over and above the contractual limit unless they have previously and specifically agreed that they will not.

Lockton would be happy to review your existing insurance cover. There is no charge for this process and you are under no obligation. If this is of interest, all you need to do initially is send a copy of your current schedule to us. We can then produce an initial indication of premium and terms.

It's worth bearing in mind that our collectors' car policy is underwritten exclusively for Lockton by AXA and, as previously mentioned, includes a number of excellent benefits designed with you in mind; you can learn more about these here.

By working with you and the company with whom you're entrusting your vehicle, we can help keep the entire process simple and produce a cost-effective solution.