Med Pay, Made Whole, and Statute of Limitations

The auto policy's Medical Payments (Med Pay) coverage pays for the medical expenses of an insured and passengers after an accident. Automobile insurance laws vary from state to state. Med Pay will pay no matter who caused the accident, although if someone else is at fault, the insurer may have subrogation rights. Finally, the chart below also lists the statutes of limitations. 

This chart is current as of the date I wrote it, but adjusters should be familiar with their state’s rules. I cannot guarantee the accuracy of the list. Because laws and regulations can change without notice, an attorney should be contacted if there are any questions regarding this chart. These materials are provided for informational and educational purposes only and do not constitute legal advice or legal opinions because I am not an attorney.

Alabama

Adheres to the Made Whole Doctrine. The insurer may pursue subrogation after the insured is made whole. The insured has been made whole when the at-fault party has completely compensated for all of the insured's losses; all sources of reimbursement must be considered in order to determine if the insurer has been made whole. This applies to liability and property damage claims. The insurance policy can specifically state that the Made Whole Doctrine does not apply. The insurer must determine if the insured has been made whole.

Alaska

It does not appear Alaska adheres to the Made Whole Doctrine, but adjusters are encouraged to seek information from subrogation counsel.

Arizona  

It does not appear Arizona adheres to the Made Whole Doctrine, but adjusters are encouraged to seek information from subrogation. The 9th Circuit Court made the doctrine into a federal common law concerning health care insurance. There is no mention of liability or property insurance.

Arkansas  

Adheres to the Made Whole Doctrine. An insurer cannot subrogate unless the insured has been made whole for his loss. An insurer should not recover any payments that should go to the insured. Arkansas courts determine whether an insured has been made whole based upon the facts presented and the insured and insurer are not entitled to a trial by jury on this issue.

California  

Adheres to the Made Whole Doctrine. In California, an insurer cannot recover any third-party funds unless the insured has been made whole for the loss. The subrogation rights and reimbursement rights of a first-party Med Pay insurer fall within the rubric of subrogation, and thus both of those rights are limited by the Made Whole Doctrine. California courts recognize the Made Whole Doctrine when the tortfeasor could not pay his or her “entire debt” to the insured.

Colorado  

Colorado adopted the Made Whole Doctrine but is limited only to the uninsured motorist (UM) coverage context.

Connecticut

It does not appear Connecticut adheres to the Made Whole Doctrine. Adjusters are encouraged to seek information from subrogation counsel.

Delaware

It does not appear Delaware adheres to the Made Whole Doctrine. There are currently no case laws discussing the doctrine. Adjusters are encouraged to seek information from subrogation counsel.

District of Columbia 

Adheres to the Made Whole Doctrine. It provides that if an insurer pays less than the insured’s total loss, the insurer cannot subrogate until the insured has been compensated for his entire loss. The District of Columbia reasonably applies the Made Whole Doctrine as a “default rule” which means that parties to an insurance policy can “contract out of” the Made Whole Doctrine by inserting sufficient language clearly stating the intent of the parties to avoid the effect of the Made Whole Doctrine.

Florida

Adheres to the Made Whole Doctrine. It is intended to apply only in “limited fund” scenarios where the tortfeasor lacks sufficient funds or insurance coverage. Florida law allows the Made Whole Doctrine to be applied to protect the insured’s direct recovery from a tortfeasor, where the insured’s own insurer makes a subrogation claim upon the insured’s recovery. Therefore, an insurer does not have a right to subrogate or reimburse against a tortfeasor unless the insured has collected all of his damages and been made whole.

Georgia 

Adheres to the Made Whole Doctrine and adjusters may consult with subrogation counsel. Georgia court calls it the “Full Compensation” Rule (§ 33-24-56.1) which states that a benefits provider (including the automobile insurer paying medical expenses) may provide for in its policy language and pursue reimbursement for medical expenses from the injured party only if the injured party has received a recovery that exceeds the sum of all losses incurred as a result of the injury.

Hawaii  

Hawaii has not applied the Made Whole Doctrine in a traditional subrogation case. Subrogation rights are determined by contract, not on principles of equity.

Idaho 

It does not appear Idaho adheres to the Made Whole Doctrine. To date, there are no reported state court cases that discuss the doctrine in any automobile insurance subrogation. The 9th Circuit made it into a federal common law but only applies to ERISA health insurance subrogation.

Illinois  

Adheres to the Made Whole Doctrine. Illinois adopted the doctrine under the Health Care Services Lien Act (HCSLA) amended in 2013. It delineates the Made Whole Doctrine in subrogation cases and other reimbursement actions by reducing lien based on the insured’s comparative fault, or when a claim is uncollectible due to limited liability insurance.

Indiana  

Adheres to the Made Whole Doctrine but adjusters are encouraged to consult with a subrogation counsel. Indiana enforces the doctrine through case law and even applies it by statute § 34-51-2-19 (1999). Contract terms can overrule the doctrine but they must be clearly stated in the policy language.

Iowa  

Adheres to the Made Whole Doctrine and adjusters are encouraged to seek information from subrogation counsel. Iowa’s version of Made Whole Doctrine is known as the “Full Recovery Rule”. Under this rule, an insurer cannot reimburse or subrogate until the insured has been fully compensated for his damages. Generally, Iowa recognizes that the resolution of subrogation issues is guided by the equitable principle that an injured party is entitled to be made whole.

Kansas  

It does not appear that Kansas adheres to the Made Whole Doctrine but adjusters are encouraged to seek information from subrogation counsel. Kansas has little case law that discusses the doctrine but the Supreme Court specified that it is the discretion of the trial court to apply equitable standards in assessing damages so the plaintiff can be made whole. In the ERISA Plans, the 10th Circuit has held that the Made Whole Rule is the default rule, however; it can be voided when the plan language specifically excludes the doctrine by its terms.

Kentucky  

Adjusters are encouraged to seek information from a subrogation counsel. Kentucky Supreme Court held that principles of equity did not require the insured to be “made whole” before the insurer was entitled to subrogation where; a) insurance language clearly allows the insurer to subrogate the insured’s interests in any recovery in favor of the insurer until he was reimbursed; (b) each party was represented by counsel and enjoys equal bargaining position, and (c) the insured’s losses had already been sustained and were fully known and appreciated.

Louisiana  

Adheres to the Made Whole Doctrine. Louisiana refers to the doctrine as the “Full Compensation Rule” and requires an insured to be fully compensated before an insurer may exercise its subrogation rights. The state places the burden of proving full compensation on the insured beneficiary, as opposed to requiring the insurer to prove it.

Maine

Adjusters are encouraged to seek information from a subrogation counsel. Maine does not appear to have any case law which applies the Made Whole Doctrine, but in the case of uninsured motorist subrogation, the state mandates that before the right of subrogation is exercised, the insured recovery damages must be fully satisfied. 

Maryland 

Maryland doesn't recognize the Made Whole Doctrine. There are currently no case laws discussing the application of the doctrine.  

Massachusetts 

It does not appear that Massachusetts adheres to or applies the Made Whole Doctrine. Adjusters are encouraged to seek information from subrogation counsel. In reference to the health insurance plan’s right of reimbursement, following the Massachusetts law, the 1st Circuit has held that the Made Whole Doctrine will not prevent a health insurance plan from subrogating where, despite the fact that the insured is not made whole, the plan gives itself a right according to its terms. It can be construed that the doctrine is just a “gap filler” which comes into play only when contracts fail to address the issue clearly and when the insured decides to sign away the right to be made whole. 

 

Michigan

Adheres to the Made Whole Doctrine and adjusters are encouraged to seek information from subrogation counsel. Iowa's state Court held that if the total amount received by the insured after deduction of attorney’s fees and cost, does not fully compensate him, the insurer is not entitled to subrogation against the insured.  

Minnesota

Adheres to the Made Whole Doctrine. Generally, Minnesota mandates that if the insured is not made whole, subrogation may be denied. The state refers to the doctrine as the “Full Recovery Rule” which is applied regardless of whether or not the subrogation rights arise from equity or contract. The 8th Circuit agrees with Minnesota Supreme Court that the Full Compensation Rule can be waived in the plan or policy.  

Mississippi

Adheres to the Made Whole Doctrine. It requires that the insured be made whole, and damage recovery is allowed before an insurer can enforce his right to subrogate. Unfortunately, Mississippi does not indicate the difference between equitable subrogation and contractual subrogation with regard to the application of equitable subrogation defenses, such as the Made Whole Doctrine.

 

Missouri

Does not adhere to the Made Whole Doctrine and adjusters may seek information from subrogation counsel. There are currently no case laws in Missouri that discuss the Made Whole Doctrine. The courts expressly distinguish between contractual subrogation and equitable subrogation and have held that equitable principles (such as the Made Whole Doctrine) simply do not apply to contractual subrogation rights.

Montana

Adheres to the Made Whole Doctrine. Montana strictly enforces made whole policy. It mandates that an insured must be totally reimbursed for all losses as well as costs, including attorney’s fees involved in recovering those losses, before the insurer can exercise any right of subrogation, regardless of contract language to the contrary.  

Nebraska

Adheres to the Made Whole Doctrine and adjusters may seek information from subrogation counsel. The statute orders that an insurer asserting subrogation rights will be denied if the insured has not been made whole. There is no exact formula to determine whether an insured has been made whole in Nebraska. However, some considerations include medical expenses, other damages suffered by the insured, the tortfeasor’s ability to pay beyond the amount of the subrogor’s settlement, and whether the settlement satisfies all damages sustained by the insured. The doctrine may be overridden by specific contract terms in the policy.

Nevada

Adjusters are encouraged to seek information from subrogation counsel in regard to the application of the doctrine. To date, Nevada had not addressed the application of the Made Whole Doctrine. The courts held that if a contract specifically excludes the Made Whole Doctrine, the doctrine will not apply to limit an insurance company’s subrogation rights.  

New Hampshire

Adjusters are encouraged to seek information from subrogation counsel in regard to the application of the doctrine. New Hampshire has at least been applied to health insurance subrogation. Health insurers may not subrogate where the Plan beneficiary is not made whole from the third-party recovery. 

 

New Jersey

Adheres to the Made Whole Doctrine and adjusters are encouraged to seek information from subrogation counsel. It mandates that an insurer who is entitled to subrogate may do so as long as the insured has been made whole. New Jersey applies the doctrine in automobile insurance subrogation, even though direct automobile insurance medical subrogation and health insurance subrogation are not allowed.

 

New Mexico

Does not adhere to the Made Whole but adjusters are encouraged to seek information from subrogation counsel. New Mexico has its own hybrid version of the doctrine called “Doctrine of Equitable Apportionment” which reduces the amount reimbursed to the subrogated insurer when the insurer’s recovery represents only a portion of the actual damages. Unlike the “all or nothing” effect of the Made Whole Doctrine, this Doctrine of Equitable Apportionment has a fairer result since the subrogation interest is reduced proportionately to the insured’s total claim.

New York

Adheres to the Made Whole Doctrine where an insurer has no right of subrogation against its insured when the insured’s actual loss exceeds the amount it has recovered from both the insurer and the third party. New York court applies the doctrine in the context of equitable subrogation and extended it to contractual subrogation.

 

North Carolina

Does not adhere to the Made Whole but adjusters are encouraged to seek information from subrogation counsel. North Carolina does not have any case law as to how the doctrine is applied. 

North Dakota

Does not adhere to the Made Whole but adjusters are encouraged to seek information from subrogation counsel. North Dakota has not adopted the doctrine either for subrogation generally or in the subrogation rights of health insurers and health plans. 

Ohio

Adheres to the Made Whole Doctrine. Ohio courts enforce the Made Whole Doctrine where an insurer’s subrogation claim will not be given priority unless full recovery to the insured is provided. Plan language though can overrule the doctrine.

 

Oklahoma

Adheres to the Made Whole Doctrine. Oklahoma first enforced the policy with regard to an ERISA Plan. The doctrine applies when the plan’s subrogation or reimbursement terms neither expressly set a priority for repayment of benefits, nor otherwise give the right to subrogation or reimbursement before any funds are paid to the beneficiary. Generally, the state’s policy does not allow an insurer from recovering anything by way of subrogation or reimbursement until the insured has been made whole for recovery of all compensatory damages to which he is entitled.

 

Oregon

Adjusters are encouraged to seek information from subrogation counsel in regard to the application of the doctrine. Oregon’s Senate Bill 421 (2019) introduced a hybrid version of the Made Whole Doctrine to PIP subrogation under either § 742.536 (PIP Lien) or § 742.538 (direct PIP subrogation). 

Pennsylvania

Adheres to the Made Whole Doctrine. Pennsylvania recognizes and applies the doctrine. It states that an insurer cannot enforce its right to subrogate an insured’s recovery from a third party unless that recovery is for the full amount of the insured’s damages. The Made Whole Doctrine in Pennsylvania is an equitable doctrine. Equitable principles continue to apply when a subrogation claim arises out of a contract.

 

Rhode Island

Adheres to the Made Whole Doctrine. Rhode Island appears to disapprove contractual limitations or subrogation provisions that hinder an insured's recovery where the insured has not recovered his actual loss.

South Carolina

Does not adhere to the Made Whole but adjusters are encouraged to seek information from subrogation counsel. There is no case law discussing the doctrine in South Carolina. However, there is a hybrid version being enforced by the state with regard to health insurance subrogation through the application of S.C. St. § 38-71-190. The statute provides that a health insurer may recover no more than the amount of insurance benefits that the insurer has paid previously in relation to the insured’s injury by the liable third party. It allows for a “pro-rata” subrogation right by the health insurer, instead of the “all or nothing” Made Whole Doctrine. T 

South Dakota

Adheres to the Made Whole Doctrine. In South Dakota, the Made Whole Doctrine is a default rule subject to the agreement of both parties. The Supreme Court has held that subrogation rights may arise independently of the Made Whole Doctrine, especially where a policy provides for the right of subrogation without requiring the insured to be made whole. It appears that the state meekly applies the Made Whole Doctrine, but it can be overcome by simple subrogation policy language which does not require applying the doctrine.

 

Tennessee

Adheres to the Made Whole Doctrine. Tennessee subscribes to the doctrine which states that an insured must be made whole for damages before an insurer is entitled to either subrogation or reimbursement, even if the insurer claims that it made a payment because it did not know of a third party’s liability. This is true regardless of the language in the insurance policy and whether the insurer is asserting a right of subrogation or a right of reimbursement.   

Texas 

Adheres to the Made Whole Doctrine and adjusters are encouraged to seek information from subrogation counsel. Texas Supreme Court clarified that the terms of a plan or policy can deny the application of the Doctrine. If a contract states that subrogation is allowed regardless of whether the insured is first made whole, the contract’s specific language must be observed and the equitable defense of the Made Whole Doctrine must give way. In Texas, the party filing suit is responsible for proving that the insured has been made whole and determining exactly what portion of a third-party settlement satisfies covered as opposed to non-covered losses. It means that if a subrogated carrier settles directly with a third party and the insured must file suit to seek reimbursement from the carrier, the burden is on the insured.

Utah

Adheres to the Made Whole Doctrine. Utah’s doctrine application depends upon the court’s determination of the legislative intent and purpose of the statute. Equitable principles should be observed in determining how the right is to be exercised where the statute merely grants the insurance carrier the right to subrogation. However, the doctrine will not be applied if the statute gives a detailed statutory scheme that explains how an insurer's subrogation right may be exercised and how the proceeds from an action against the third party are to be distributed.  

 

Vermont

Recognizes subrogation as equitable but Vermont doesn’t appear to apply the Made Whole Doctrine.

 

Virginia  

Adjusters are encouraged to seek information from subrogation counsel in regard to the application of the doctrine. There is an authority in the Virginia case law for the proposition that the doctrine may be overridden by a specific policy language

Washington  

Adheres to the Made Whole Doctrine. Washington refers to it as the “Thiringer Doctrine” where an injured party must be made whole before the injured party’s insurer may require the injured party to reimburse the insurer for a subrogation or reimbursement claim. The general rule is that while an insurer is entitled to be reimbursed to the extent that its insured recovers payment for the same loss from the tortfeasor responsible for his damage, it can recover only the excess which the insured has received from the wrongdoer, remaining after the insured is fully compensated for his loss.

West Virginia 

Strongly adheres to the Made Whole Doctrine where under its general principles of equity, and in the absence of statutory law or valid contractual obligations to the contrary, an insured must be fully compensated for injuries or losses sustained before the subrogation rights of an insurance carrier will take place.

 

Wisconsin  

Adheres to the Made Whole Doctrine and adjusters are encouraged to seek information from subrogation counsel. Wisconsin is called the “mother of all states” because its procedures in determining how an insured is made whole were used by other states. The state courts have sometimes referred to the doctrine as the “Anti-Subrogation Rule” or the “Rimes Made Whole Doctrine.” The assumption is that subrogation ordinarily does not surface until the debt or loss has been fully paid. The test of being made whole depends on whether the insured has been completely compensated for all types of damages, including personal injury and property damage.

Wyoming

Does not adhere to the Made Whole but adjusters are encouraged to seek information from subrogation counsel. Wyoming does not have reported decisions that mention the Made Whole Doctrine. The 10th Circuit has yet to decide whether it will adopt the Made Whole Doctrine under federal common law for interpretation of ERISA Plans.