From time to time, consumer lawyers in Houston must deal with subrogation claims from their insurers. This can result when an insured has received some reimbursement from a loss from an insurer, but seeks further reimbursement from someone who has harmed them. For example, an insured might have a total loss for a vehicle worth $30,000.00. If the insured has a $1,000 deductible, she will only received $29,000.00. The insured can then look to the person who caused the wreck for the $1000 deductible in addition to losses that are not covered by the policy.
In cases similar to these, the insurer might claim that the money the insured seeks belongs to them, and that the insured is seeking money, in part, for losses already covered by the policy. Sometimes the courts will look to the policy language to determine the insurers rights, and sometimes, they will look to the law of equity. The dispute over when an insurer can “come after” the money is a complicated one, and many cases seem to contradict each other.
Some cases state that an insurer cannot come after the money if the insured is only seeking to be made whole. In the case above, that would seem to be the case. The insured is only seeking to get $1000 in order to be at the $30,000 he lost. Consumer Plaintiff’s Attorneys tend to prefer these types of holdings. They cite cases that state, “[w]hile an insurance contract providing expressly for subrogation may remove from the realm of equity the question of whether the insurer has a right to subrogation, it cannot answer the question of when the insurer is actually entitled to subrogation or how much it should receive.” The court can look to whether the insured prejudiced the insurers subrogation rights, and whether the subrogee waited until settlement.
On the other side of the coin, there are cases that state a contract between the insured and the insurer may allow the insurance company to recover any portion of the money that is sought as compensation for amounts covered, even if the insured has not been made whole.