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Florida’s “Made Whole” Doctrine: Returning A Portion Of The Insured’s Deductible Is Permissible – For Now!

April 1, 2005

This article was originally published in the Subrogator, a publication by the National Association of Subrogation Professionals, Spring/Summer 2005, Page 101. © Copyright 2005 by NASP. All rights reserved. Republished by Butler with permission from NASP.  

Per Florida’s Made Whole Doctrine, insurers need only reimburse their insureds to the extent of their insured’s legally recoverable loss. In the recent case of Monte De Oca v. State Farm Fire & Casualty Co., —So.2d—, 2004 WL 2955008 (Fla. 3d DCA 2004), the Third District Court of Appeal supported the partial return of a deductible to an insured based on the insured’s comparative negligence. This case is significant because it clarifies that an insurer, in Florida, does not violate the Made Whole Doctrine when the insurer returns only a prorated portion of the deductible to the insured due to the insured’s comparative negligence.

In Monte De Oca, the insured was involved in an automobile accident. State Farm paid the insured the full amount of the insured’s property damage claim, minus a $500 deductible. State Farm then pursued a subrogation claim against the other driver. The insurers for both drivers reached an agreement and apportioned the fault between the drivers on the basis that both drivers were 50 percent negligent. As a result, each insurer recovered only half of its subrogation demand. State Farm then reimbursed its insured only $250.

The insured filed suit against State Farm, seeking the full deductible under the Made Whole Doctrine. The insured alleged that without receiving the full deductible, he had not been “made whole.” The trial court dismissed the Complaint and stated that since the insured was legally responsible for 50 percent of the harm, he was not entitled to recover his full deductible. The insured appealed, and the Third District Court of Appeal affirmed the trial court’s decision.

Judge Wells’ dissent, however, may be the most important part of the Monte De Oca decision. Judge Wells did not agree with the majority’s conclusion that an insured’s comparative negligence should be considered in determining when an insured has been “made whole” based on the following reasons: (a) an insurer’s obligation to pay under the terms of an insurance policy does not hinge on an insured’s wrongdoing; (b) the insured did not give the insurer authority to determine the extent of comparative fault; (c) the legal authorities that the majority relied upon to support its conclusion that wrongdoing or fault must be considered in determining whether the insured had been made whole did not support that conclusion; (d) the insured would not receive a double recovery if the entire amount of the deductible was paid; and (e) since the made whole doctrine was not waived or modified to permit a pro rata reimbursement by the insurance policy, the insured must be reimbursed 100 percent of the deductible to be made whole. Judge Wells’ view is significant because other Florida courts, in the future, might disagree with the Third District and adopt Judge Wells’ well-reasoned dissent. After all, an insurer’s obligation to pay under the terms of an insurance policy does not hinge on an insured’s wrongdoing. Insurers in Florida may, at some time in the future, be responsible for returning 100 percent of the insured’s deductible, no matter how much it collects on subrogation claims. But, fortunately, for now, the opposite holds true.

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