Key Takeaways

• The Make Whole Doctrine restricts an insurer’s subrogation rights from being enforced until after its insured has been fully compensated for their loss.

• Issues involving the Make Whole Doctrine are likely to occur when the insured’s losses exceed the value of their policy.

• The insured’s rights to be compensated, or made whole, have priority before an insurer’s rights of subrogation can be exercised.

• Insurers may mitigate against these claims by the terms of their policy and communication with their insured.

Insurers need to be aware in Connecticut that the premature enforcement of their subrogation rights may result in claims against them by their insured. In its January 6, 2026, decision in Orlando v. Liburd, the Connecticut Supreme Court reversed the trial and Appellate Court and reinstated a plaintiff’s claims for unjust enrichment against their insurance company which had exhausted the tortfeasor’s insurance policy through its subrogation.

Facts of the Case

The plaintiff was involved in a motor vehicle accident and brought claims against the tortfeasor for the diminished value of their vehicle and other related losses. The tortfeasor then impleaded the plaintiff’s insurer, which had though an out of court process, already received the full value of the tortfeasor’s insurance policy of $25,000. The plaintiff then brought direct claims against his insurer, alleging it was unjustly enriched by receiving the payment before he could fully litigate his claims against the tortfeasor.

The trial court on its own raised whether the unjust enrichment claims were ripe to bring in the case, as the plaintiff had not yet obtained a judgment against the tortfeasor. The plaintiff’s insurer subsequently filed a motion to dismiss, which was granted on the basis that the claims against it would not be ripe until after the plaintiff obtains a judgment against the tortfeasor and in what amount.

The Connecticut Appellate Court affirmed the trial court’s decision; however, the Connecticut Supreme Court has reversed those decisions, allowing the plaintiff’s unjust enrichment claims against his insurer to proceed. The Supreme Court decided that the claims were ripe for adjudication, determining that the plaintiff’s insurer diminished the funds available to the plaintiff that he could be compensated from.

The Insurance Association of Connecticut and the American Property Casualty Insurance Association submitted a joint friend of the court brief, taking the position that the plaintiff’s claims were unprecedented and would result in double damages for the plaintiff. The court expressly rejected this position.

Make Whole Doctrine

The Supreme Court explained its decision by reasoning that when the amount recoverable from the tortfeasor is insufficient to satisfy both the plaintiff’s losses and the amount the plaintiff’s insurer paid on the claim, the competition for the limited recovery pool may lead to inequitable results. It explained that the make whole doctrine addresses this concern by restricting the enforcement of an insurer’s subrogation rights until after the insured has been fully compensated for their injuries or otherwise made whole.

It went on to state that the make whole doctrine is the default rule in Connecticut and that the doctrine applies only when “(1) the insured’s total loss exceeds the amount paid by his insurer, (2) the available sources of recovery are insufficient to fully compensate both the insured and the insurer, and (3) the insurance policy is silent as to the parties’ intent to depart from the default rule.”

Next Steps

In a footnote to the decision, the court helpfully provides some suggested steps for insurers to take to avoid the situation that the parties before it were in. The first suggestion is that the make whole doctrine is the default rule and that parties may provide for differently if it is done expressly in the policy’s contract. The second is for insurers to communicate with their insured or for their counsel to determine if the insured has been fully compensated before pursuing its subrogation rights.

If you have any questions about how this decision impacts your business, please contact:

• Maxwell C. LaFrance
• Jonathan A. Beatty
• Albert J. D’Aquino
• Emilio F. Grillo
• Or another member of our Civil Litigation and Trial group.