The Made Hole Doctrine states that individuals must be “made whole” before their insurance can subrogate them. Subrogation is when your insurance takes money from you, or the final settlement, to reimburse itself for the payments it already made to you. The Made Whole Doctrine is designed to prevent insurers from requiring payments from you after you’ve been compensated for your damages.
What Does “Made Whole” Mean?
Whenever you sustain personal injuries or property damage, your insurance may pay out funds while you are recovering. For example, hospital bills or prescriptions. So, if your insurance company paid out funds to you after a personal injury, they will want to be compensated by the liable party.
In a case in which you are pursuing a liable party for damages after sustaining injuries, you and your insurance will both be seeking compensation from them. If the liable party cannot fully compensate both you and your insurance, the Made Whole Doctrine prevents the insurance company from taking any of the money you’ve been rewarded from the liable party.
When Can the Made Whole Doctrine Be Overruled?
The Made Whole Doctrine can be overruled if your insurance contract states that it can overrule the doctrine. An insurer might use this type of language to overrule the made-whole doctrine:
“the insurer is entitled to all rights of recovery that the insured person to whom payment was made has against another.”
Basically, the insurance contract language is saying any amount of money the insurance company pays out on a claim can be recovered from any amount you recover from the liable party. However, an insurance contract is not set in stone and can be legally challenged. A personal injury lawyer can object to the sufficiency of the language of your contract so the Made Whole Doctrine can still apply, regardless of the language of the contract.
When Does the Made Whole Doctrine Apply?
The Made Whole Doctrine is generally used when an injured party seeks a waiver of the contractual obligation to reimburse medical insurance or car insurance benefits back to the insurer. This obligation usually arises after a personal injury claim judgment or settlement. For example, let’s say you file a personal injury lawsuit after a car accident and the liable party is 100% at fault.
Your health insurance may pay you $1500 for medical treatment of a fractured wrist. Let’s say your total damages equal $15,000, but you’re only able to receive $10,000 from the liable party. Since the $10,000 does not “make you whole” after the accident, you can make the argument under the Made Whole Doctrine that you are not required to reimburse the insurance company for the $1500 out of your awarded $10,000.
How an Attorney Can Help
Insurance can be relentless when it comes to reimbursement, but a personal injury attorney can protect your right to compensation and keep the insurance company from taking advantage of your situation. For further clarification of how the Made Whole Doctrine applies to your claim, contact Maison Law today for a free consultation and case evaluation.
