Personal Injury Topics / Make Whole Rule

Many people have health insurance which would apply for medical expenses incurred following an accident.  In addition, there is usually language within the health insurance policy which requires that in the event the insured receives money from a third party, the health insurance carrier would be entitled to reimbursement.  Most people, upon receiving a settlement from the wrongdoer’s insurance company, will blindly reimburse their health insurance carrier for the money they paid for the medical bills.  Unfortunately, those who do are not, in many cases required under the law to reimburse the health insurance carrier for the amounts they had paid.

Under the so-called “make whole rule”, the injured party must be made whole before the health insurance company is entitled to reimbursement.  The case of Sapiano vs. Williamsburg Nat. Ins. Co, 28 Cal.App. 4th 533 (1994), was the first case to implement the “make whole rule” in California essentially holding that an insurance carrier cannot assert its contractual right to repayment where the total third party insurance is insufficient to compensate the full loss suffered by the insured.  Applying this rule to the following example, assume I have a client who had broken his arm in an automobile accident.  His medical expenses, which were paid by his health insurance, totals $8,000.00.  The person that caused the collision has a policy of only $15,000.00.  If we assume that the case is worth at full value the amount of $30,000.00 and since we were only able to collect the policy limit of $15,000.00 from the insurance company of the person who caused the accident, my client has NOT been made whole.  Therefore, under the Sapiano case, my client does not need to reimburse any money to his health insurance.

Should you, a family member, or a friend be involved in an accident where they have been injured feel free to have them call me for a free consultation.  My contact information can be obtained by clicking here.  I represent people throughout the entire State of California.