Averill v. Farmers Insurance Company
Pearl Averill’s daughter was in a car accident where the car was totaled. Farmers was her insurer. Farmers paid Ms. Averill for the total loss less a $500 deductible and then sought to recover the amount it paid directly from the other person involved in the accident. Without Ms. Averill’s involvement, Farmers engaged in an arbitration with the insurance company for the other driver. The arbitrator determined that both parties were 50% at fault for causing the accident. Farmers then recovered half of the $500 deductible from the other party’s insurer. It refunded the $250 to Ms. Averill. Ms. Averill argued that Farmers was not entitled to keep the other half of the deductible because Ms. Averill had not been “made whole” for her loss. The Court of Appeals disagreed, holding that the “made whole doctrine” only applies in situations where an insurance customer pursues a recovery from an at fault party, but is not fully compensated for their loss. Since Farmers and not Ms. Averill was the entity that pursued recovery from the at fault party, the Court of Appeals determined, Ms. Averill could not claim that she was not “made whole.”