Delaware Made-Whole Rule: What the Law Says and What We Could Not Confirm

By the FigureMyTax Editorial Team · How we calculate

We did not find a Delaware statute that adopts the made-whole doctrine or limits a health insurer's reimbursement from your settlement. Delaware does limit a PIP insurer's subrogation, and bars you from claiming PIP-covered damages from the at-fault driver.

What the made-whole doctrine is

The made-whole doctrine says an insurer that paid your bills cannot be repaid from your recovery until you have been fully compensated for all your losses. Some states enact it by statute; others leave it to courts or to the insurer's contract. We looked for a Delaware statute and did not find one for health insurers.

What a secondary source reports

A law-firm compilation of Delaware subrogation law reports that Delaware allows subrogation of health and disability benefits, that the made-whole doctrine does not apply, and that the common fund doctrine does, and notes that the Third Circuit has been reluctant to apply made-whole where plan language disclaims it. We did not read the cases it cites, so treat this as a lead to confirm, not as settled law.

What the PIP statute does say

Delaware's PIP insurer is subrogated to your rights to the extent of benefits it provided, but the subrogated rights are limited to the maximum amount of the at-fault driver's liability coverage available for you, after your claim has been settled or otherwise resolved, and a liability insurer's settlement with you cannot be challenged by an insurer with subrogated rights (21 Del. C. 2118(g)). You also cannot plead damages that PIP covers in a suit against the at-fault driver (2118(h)).

A worked example

Say your health plan paid $9,000 and your settlement is $100,000 with a one-third fee and $3,000 in costs. With no statute to limit it, the plan could claim the full $9,000 under its terms, and the Delaware medical lien calculator shows it as an upper bound. A reduction for your share of fees, called common fund, is something to ask the plan for in writing; for a self-funded employer plan, federal law may control.

What to do

Ask the plan or insurer for an itemized reimbursement claim and its plan document, and ask whether it will reduce the claim for your attorney fees and costs. See how hospital, PIP and health plan claims differ and how Medicaid and Medicare recover.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Delaware's rules apply to your specific case with a licensed Delaware attorney.