Understanding the “Made Whole Doctrine” in Georgia Personal Injury Settlements

After a long, contested personal injury case, receiving a settlement can feel like crossing the ultimate finish line. For some survivors, however, crossing the finish line can come with the complication of insurance subrogation. When insurance companies attempt to recover reimbursement of their expenditures related to the original injury, personal injury plaintiffs may be forced to watch their settlements dwindle away right in front of their eyes.

Thankfully, Georgia has certain mechanisms in place to help personal injury survivors protect their settlement awards against unfair or inflated subrogation requests from insurance companies. Here’s a broad overview of how the “Made Whole Doctrine” applies in personal injury cases and an explanation of how an experienced lawyer can help injured persons and survivors fight for full compensation before fielding requests for reimbursement.

What is subrogation?

Subrogation is a process insurance companies can employ to recover certain healthcare costs they may have paid in the immediate aftermath of an accident. Subrogation may come into play in an accident scenario where another party (other than the injured policyholder) is ultimately found responsible for the injured party’s damages and pays for those damages.

For example, let’s say you’re injured in a car accident and go to your local emergency room for treatment. Even if someone else was to blame for the crash, you can provide your own health insurance details when you arrive at the ER. This means your insurance company should pay their contractual portion of the costs that are actually the at-fault party’s responsibility under the law. If you go on to win a personal injury lawsuit against that at-fault party or reach a settlement with that party, your insurance provider may submit a subrogation request to reimburse themselves for the amount they paid. This may be their right under Georgia law.

In many cases, the money insurers seek in a subrogation request will come out of a plaintiff’s personal injury settlement. Without a clear understanding of subrogation or in the event that a plaintiff walks away with a lesser settlement award than anticipated, subrogation requests could put a significant dent in their settlement amount.

What is the “Made Whole Doctrine?”

The Made Whole Doctrine is a legal principle that aims to prevent injured parties from having their settlement awards ravaged by subrogation requests to the extent that they are left without the funds they need to cover their reasonable losses. The idea is that insurers in certain kinds of personal injury cases are generally barred from recovering any reimbursement until or unless a plaintiff has been “made whole” following the injury.

In practice, the goal is for the injured victim to receive a settlement that fully compensates them for their damages. That means you need to walk away at the end of a case with enough money to cover things like out-of-pocket medical expenses, lost wages, emotional damages, and any other damages you were entitled to. If subrogation would prevent you from being “made whole” for these losses, your insurance company may be out of luck in terms of seeking reimbursement. This depends on the type of insurance you have.

How the Made Whole Doctrine works in Georgia

Georgia has codified the Made Whole Doctrine into state law to protect personal injury claimants in our state (in certain cases). According to O.C.G.A. §33-24-56.1, insurers may only seek reimbursement for benefits they paid out if:

1. The injured party has been fully compensated for all of their reasonable economic and non-economic losses
2. The amount sought via subrogation is equal to what the insurance company actually provided
3. The subrogation amount is appropriately reduced to account for attorney’s fees and other case costs

Georgia law provides additional statutory requirements for these kinds of cases, but – broadly speaking – if a plaintiff can show that their settlement award will not fully cover their reasonable, accident-related expenses, some insurance providers will likely be barred from seeking reimbursement. Georgia law also explicitly prohibits insurance companies from holding policyholders’ benefits hostage or reducing coverage limits to force reimbursement for upfront expenditures, so accident survivors don’t have to worry about being taken advantage of when they are at their most vulnerable. Health insurance companies should pay for the medical expenditures they are contracted to pay for without holding out just because there may be a third party claim.

How personal injury lawyers deal with subrogation

Subrogation requests can complicate a personal injury case, but an experienced personal injury lawyer can help accident victims protect their settlement awards. In disputed cases, the insurer must establish its statutory right to reimbursement, and courts may evaluate whether the injured party has been fully compensated and is subsequently in the position to reimburse them for their upfront costs. However, plaintiffs should still be prepared to show that their settlement award will not sufficiently cover their reasonable costs or that subrogation will prevent them from being made whole in the event that these discussions become contested.

This is why subrogation requests usually aren’t handled automatically and rely instead on back-and-forth negotiations between insurers, policyholders and their legal representatives. Your personal injury lawyer can help you gather the documentation you need to support your argument against subrogation so you can retain more of the funds you need to cover your losses.

These cases can be very complicated and often require a high-level understanding of state law; insurance policy fine-print; and the overall settlement process. Your attorney is your advocate, and they can help you calculate the full value of your economic and non-economic losses so you can get a clearer idea of whether or not your insurance company has a right to subrogation in your case. In the absence of effective, engaged legal counsel, you could find yourself walking away from your case with less compensation than you need or deserve.

Final thoughts

Subrogation requests can sneak up on personal injury plaintiffs, but the Made Whole Doctrine is intended to prevent accident survivors from ceding too much ground at the conclusion of their case. While it certainly makes sense for insurers to seek reimbursement for expenditures in some cases, Georgia law aims to prevent these reimbursement requests from impacting a survivor’s ability to cover their reasonable accident-related losses.

At Harris Lowry Manton LLP, we understand that accident survivors often rely on their settlement awards to help them move forward after suffering a serious injury. When a subrogation request threatens a survivor’s ability to cover their costs and provide for their future, our team is dedicated to helping clients advocate for their rights while adhering to Georgia law.

If you or a loved one is fielding a subrogation request after receiving a personal injury settlement, don’t wait to speak to a professional about what options you may have available for protecting your financial award. Fill out our online contact form to schedule a free consultation with our team, and let’s discuss whether the Made Whole Doctrine may be on your side.