Business & Insurance Litigation Newsletter for Indiana

Set-Offs Against Underinsurance for Medical Payments

Indiana law recognizes that insurance companies may have the right to set-off payments made under medical coverage against underinsured claims. The policy must contain an appropriate set-off provision. However, an insurer cannot reduce underinsured coverage by the amounts of medical coverage payments in cases where the amount of damages the insured is entitled to recover equals or exceeds the combined limits of both the medical payments and the underinsured motorists' coverage. Standard Mutual Insurance Company v. Pleasants, 627 N.E.2d 1327 (Ind. Ct. App. 1994).