Auto Insurance Claims: Duplicative amounts on a claim, made whole doctrine

Question
I was struck on my motorcycle by an unlicensed motorist. Their insurance is paying me the maximum based off their policy, which is 25,000. However, my insurance company already paid $4,000 of the medical bills, according to my policy. I have substantial bills to pay to the hospital/ambulance, however my insurance company has a lien to take their 4,000 out of my settlement.

I called and told them that I deserved more for this wreck, but can only be paid the maximum. I am in Kansas, and can request they waive the amount since it is not duplicative. However, they say my insurance policy was 25,000 as well, so they are not releasing the lien for the 4,000.

I desperately need that money to help pay the remainder of the medical bills. Can they seriously take 4,000 out of my settlement? Is there anything I can do?

Answer
Jason,

 In Kansas, the law on this issue is unclear.  You are dealing with what is called the "made whole doctrine".  

 The amount of your claim is unfortunate because it is probably not worth hiring an attorney for $4000.00.  The deciding factor in your case should be the policy language.  If the policy specifically gives the insurance company the right to recover their payments even if you have not received payment for all of your damages, then the answer is simple, they can take the money.  If your policy is silent on the issue, then you might win a legal fight based on the fact that you have not been made whole.


  The made whole doctrine simply says that an insurance company cannot claim a lien on payments they made to you if you have not been paid for all of your damages.  I can discuss the matter at length, but this is a legal question.  You might mention the made whole doctrine and see if you have a sharp enough representative to even know what it is.  If they do, they might recognize the issue and release their lien.

JP