The Mississippi Supreme Court in Joseph Hare v. State of Mississippi, et al., case number 97-CA-01443-SCT (decided March 18, 1999), issued an opinion addressing an important issue relating to insurance subrogation rights. The decision language appears to have wide application to all types of subrogation claims.
The case arose out of a motor vehicle accident in which the injured party received state health insurance benefits in excess of $6,000.00 and recovered the policy limits of $10,000.00 per person from his uninsured motorists carrier. At the trial court level, there was testimony that the value of the insured's claim would exceed $50,000.00. The state asserted a subrogation claim against the uninsured motorist benefits pursuant to its contract subrogation rights entitling it to recover any amounts paid.
The Mississippi Supreme Court adopted the "made whole" rule by holding that an insurance company is not entitled to subrogation until the insured has been fully compensated. The court went on to state that the "made whole" rule can not be overridden by contract language, because the intent of subrogation is to prevent a double recovery by the insured, and until the insured has been fully compensated, there can not be a double recovery.
This will impact the manner in which you handle subrogation rights in the future, and may result in a "value" dispute to determine whether or not subrogation recovery may be obtained.