How Does the Made Whole Doctrine Apply to Subrogation Claims?
After a car accident, most people turn to their insurance companies. If your car insurance company pays for your property damage or your car insurance or/and health insurance pay for your medical bills, and you were not at fault for the accident, your insurance company may seek reimbursement from the liable party. This is known as subrogation, and the Made Whole Doctrine is a rule that applies to subrogation claims.
Essentially, the Made Whole Doctrine says that insurance companies cannot seek reimbursement of expenses paid on your behalf, until you are “made whole.” The Made Whole Doctrine becomes an issue when injured individuals recover money in third party settlements.
When Can Insurance Companies Be Reimbursed?
Insurance companies can be reimbursed when another insurance company accepts liability for an accident or when you receive a settlement for accident-related damages that the insurance company has already paid.
If your health insurance company pays a $5,000.00 medical bill, for example, and the at-fault driver’s insurance company pays $5,000.00 for the medical bills and $2,500.00 for pain and suffering, your health insurance company will be able to recover from the $5,000.00 paid toward your medical bills because you have been “made whole.”
Subrogation and Property Damage Claims
Just like in a personal injury claim, property damage subrogation works in a similar manner. If your insurance company pays for the damage to your vehicle, they can recover from the at fault driver’s insurance.
However, if you also incurred property damage costs such as an out-of-pocket rental, your insurance company cannot seek reimbursement until you have been “made whole.” Let’s imagine a scenario where the at fault driver has only $5,000.00 in property damage limits.
If you incurred $500.00 in out-of-pocket rental and your insurance company spent $20,000.00 to have your car fixed, the at fault driver’s insurance must first pay you your entire $500.00 and then provide the remaining $4,500.00 to your insurance company. Your insurance company cannot agree to a pro rata reimbursement.
The Made Whole Doctrine is complicated, so it is important that you seek an attorney who understands it thoroughly in both the personal injury and property damage aspects of a claim.
Whether you need to file a personal injury claim or a property damage claim, Legal One Law Group, APC is here to help you get what you need. We are always available and accessible, offer aggressive representation, and are ready to help you get started with a FREE CONSULTATION.
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