My business as a mechanic was burned to the ground by a vehicle that caught fire because of a recalled cruise control which caught fire in the middle of the night. Insurance paid $150,000 for property loss. Iam suing the Ford Co. for other damages. The insurance company says any settlement I get from Ford I am required to pay back the insurance claim money is this true?
3 Answers from Attorneys
You have to look at your specific insurance policy. Most policies provide for a right of subrogation, which means if you collect money for the same type of damages from the third party the insurance company is allowed to get that money back. You are not allowed a double recovery.
There are ways to get around it. E-mail me for more of an answer.
Are you suing ford without an attorney? You may need my assistance.
Daniel Bakondi, Esq.
The Law Office of Daniel Bakondi, APLC
870 Market Street, Suite 1161
San Francisco CA 94102
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Your insurance company generally has a right to be reimbursed for the money it paid to you by whomever caused your loss. This is called subrogation. The extent of an insurer's right of subrogation can vary based on policy language. The important language to look at is whether the policy purports to give your insurer an assignment or priority over any claim you may have, or if it is silent on that issue.
An important doctrine which can impact the right of subrogation is called the made whole rule. In situations where the made whole rule applies, an insured can argue that it is entitled to be compensated for the entire amount of the actual loss in order to be made whole before the insurer can assert its right of subrogation.
Other than policy language, one of the main factors which influences this analysis is whether your insurer is actively participating in the litigation. Your question suggests that it is not, which might weigh in favor of applying the made whole rule. Another factor is whether the damages you are asserting against Ford Co. are for losses which were covered and paid for under your policy, such as whatever property damage the carrier paid for, or are for losses which were not covered under the policy and which were never paid for by your insurer. Also, under some circumstances an insured can argue that it should be compensated for out of pocket costs and fees before the insurer gets to be compensated.
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