July 2018 Subrogation Newsletter
On May 1, 2018, Pele spoke, and Hawaii’s Big Island was rocked with the first of more than 50 earthquakes, representing the collapse of the crater floor at Puu Oo, the open vent below Kilauea’s summit crater and lava lake. Rivers of lava destroyed over 600 homes, making it the most destructive eruption in modern times. Even before the lava had cooled to form a tomb of solid rock over the once thriving neighborhoods, many escaped from their homes with their most valuable possession — their homeowner’s policy. There is no such thing as volcano or lava flow insurance, but it is possible for an all-risk homeowner’s policy to provide some coverage.
Georgia has joined fifteen other states which have outlawed the use of hand-held cellphones and mobile devices while driving. A new law signed by Governor Nathan Deal makes watching movies, shooting video, and even the mere “holding” of hand-held devices while in the vehicle—even while stopped—illegal. House Bill 673 allows drivers to talk on the phone or text if they use hands-free technology. It was signed May 2 and took effect on July 1.
A generation ago, subrogation professionals were almost unheard of. Over the years, however, as prudent businesses and insurance companies began to insist on their statutory and contractual rights of subrogation, the profession has grown. On February 8, 2018, the Texas Supreme Court issued an opinion that grants subrogation adjusters and claims handlers the ability to sign medical expense affidavits under § 18.001 of the Texas Civil Practice and Remedies Code.
Subrogation professionals often assume that if a state employs or recognizes the “Made Whole Doctrine”, then the insured must be totally reimbursed for its out-of-pocket deductible and any uninsured losses before a carrier can subrogate. Unfortunately, this over simplistic view and application of the Made Whole Doctrine is not only erroneous, but it also results in reduced subrogation recoveries for carriers across the country. The obligation of an insurer to reimburse some or all of its insured’s deductible has very little to do with the Made Whole Doctrine in most states. Daniels v. State Farm Mut. Auto. Ins. Co., 2018 WL 3424941 (Wash. App. 2018), a brand-new decision by the Washington Court of Appeals affirms this.