It’s time for the next installment of Holcomb Law Group law series “Insurance Law from A to Z.” This was put together by our litigation group who practice in the insurance law arena. Of course, if you have questions about these or any other topics please do not hesitate to contact us.
This week’s installment – Subrogation
Mississippi has adopted the “made whole” rule in that the insurer is not entitled to subrogation until the insured has been completely compensated. The made whole rule cannot be overridden by contractual language. Hare v. State, 733 So. 2d 277, 284 (Miss. 1999).
The UM Act provides the right of subrogation to the UM carrier against the tortfeasor to the extent any UM benefits have been paid to the insured as a result of the tortfeasor’s negligence. Miss. Code Ann. § 83-11-107. The insurer also has the right to receive notice in the event the named insured institutes action against the tortfeasor. Miss. Code Ann. § 83-11-105. As noted above, the UM carrier’s right to subrogation is secondary to the insured’s right to receive a full recovery. Dunham v. State Farm Mut. Auto. Ins. Co., 366 So. 2d 668, 672 (Miss. 1979). The “made whole” rule has been held NOT to apply to UM carrier’s right to offset liability limits of the tortfeasor.
UM carriers may be precluded from a subsequent subrogation suit against the tortfeasor when the insured executes a release of the tortfeasor in consummation of a settlement with or without the UM carrier’s knowledge or consent. St. Paul Property and Liability Ins. Co. v. Nance, 577 So. 2d 1238, 1241 (Miss. 1991). Releasing the tortfeasor without the carrier’s consent usually triggers an exclusion of coverage in standard policies.
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