Wisconsin Supreme Court Update: The Rights of Insureds in Subrogation Claims
In July, 2016, the Wisconsin Supreme Court issued an opinion in Dufour v. Progressive Classic Ins. Co, 2016 WI 59, in which a five justice majority determined that an insurance company rightfully withheld $15,589.00 in damages from its own insured as a result of a subrogation claim. Mr. Dufour sustained personal injuries and property damage to his motorcycle when he was struck by an underinsured and at-fault motorist. The underinsured motorist had a liability policy covering only $100,000.00 and Mr. Dufour had his own underinsured motorist coverage which paid out an additional $100,000.00. However, Mr. Dufour’s total personal injury and property damages far exceeded this value, and thus, he was not “made whole,” a traditional tort doctrine which is designed to restore the injured party to the position they would have been but for the tortious act.
Mr. Dufour’s insurance company obtained an additional $15,589.00 from the at-fault motorist (the value of Dufour’s motorcycle) but withheld this money from Mr. Dufour to cover some of the costs which it had already paid out to him under his policy. Mr. Dufour then commenced an action against his own insurance company, contending that because of the severity of his injuries, he had not been “made whole” in terms of monetary recovery, and therefore his insurance company was not entitled to the $15,589.00 it had recovered in subrogation.
The Wisconsin Supreme Court disagreed with Mr. Dufour and issued a ruling in favor of the insurance company. The majority held that the “made whole” doctrine is but one factor in a complex calculus of an insurer’s claim in subrogation. In short, this opinion allows for insurance companies in certain circumstances to retain subrogation funds even when an insured has not been fully compensated for the injury sustained. Furthermore, the majority opined that those insureds who desire a higher rate of coverage in accident-type situations should obtain better insurance policies with higher premiums in order to maximize their lump-sum recovery in the event of an injury.
John M. Kelly, Attorney at Law, LLC is home to over 42 years of experience in dealing with personal injury claims and in navigating the complexities of insurance coverage and subrogation issues. If you have been injured in an automobile, motorcycle, or other accident, call Attorney Kelly today to place yourself in the best position to maximize your recovery.