On Dec. 21, 2011, in Jones v. Nationwide Property and Casualty Ins. Co. ,32 A.3d 1261 (Pa. 2011), the Pennsylvania Supreme Court addressed the applicability of the “made-whole doctrine” to subrogation cases involving collision coverage for automobiles. In short, the made-whole doctrine is a common law application of equitable principles that provides an insurance company may not exercise its right of subrogation until its insured receives full compensation for the underlying loss. The Supreme Court held that the made-whole doctrine does not apply to the collision coverage at issue and affirmed the dismissal of the case.
Background and Procedural History
The plaintiff, Brenda Jones, brought a class action against Nationwide Property and Casualty Insurance Co., claiming that Nationwide’s practice of prorating reimbursements of deductibles in collision coverage situations violated the made-whole doctrine. Jones was involved in a car accident with another vehicle that caused damage to Jones’ car, according to the opinion. Jones’ insurance policy with Nationwide provided collision coverage subject to a $500 deductible and provided Nationwide with the right of subrogation. Nationwide paid Jones for the full amount of damage to her vehicle less the $500 deductible. Nationwide then brought a subrogation action against the other driver and recovered under the other driver’s policy. Nationwide recovered 90 percent of the amount paid to Jones under her collision coverage. Nationwide then paid Jones $450, reflecting 90 percent of her deductible. Jones alleged that Nationwide’s practice of prorating the reimbursement of deductibles violated the made-whole doctrine.
