In a case of first impression, the state Supreme Court has ruled car insurers can prorate an insured’s deductible when recouping expenses through subrogation from a third party at fault.
Justice Max Baer, writing for a court unanimous in the result and for six of the seven justices, said that the Pennsylvania Motor Vehicle Financial Responsibility Law requires that people insured for collision coverage share the risk of damage to their vehicles with their insurance companies by the mandate that all collision coverage in Pennsylvania be written with a deductible of no less than $100. If automobile insurers could not prorate deductibles and had to make their insureds whole for their deductibles out of subrogation recoveries, then deductibles would be beside the point, Baer said in the decision Wednesday in Jones v. Nationwide Property and Casualty Insurance Co .
