At-fault policy-limit and subrogation explainer

01Problem

The at-fault driver’s insurer can offer the policy limit, call it a “full and final” settlement, and never say the number is the cap. In the October 2026 Virginia garage thread the $25,000 figure matches Virginia’s property-damage minimum (Va. Code § 46.2-472 for policies on or after Jan 1, 2025) — not the old 25/50/20 BI floor, and not the current 50/100 BI minimum. Your own insurer’s subrogation comes out of the same limit. A full release can wipe BI, UIM, and the right to pursue the driver personally, while leaving medical liens unpaid.

02Intake

Police report, photos, repair estimates, medical bills, lost wages, running total of PD + BI + uninsured losses.
Written offer, any release, every check (front and back).
Your declarations: collision deductible, rental, MedPay, UM/UIM (stacked?), BI liability limits.
At-fault insurer, claim number, named insured, any limits statement already given.
Whether collision, health, or MedPay has paid, and any subrogation/reimbursement letter or ERISA plan language.
Crash state, at-fault policy state, policy effective date (minimums follow the policy date, not the crash date); umbrella, extra vehicles, assets.

03Playbook

01
Decode the three numbers. Liability is BI per person / BI per accident / PD per accident (e.g. 25/50/25). Per-person BI is the most for one injured person. Per-accident BI is the cap for everyone, still subject to the per-person cap. PD is a separate cap. They do not share a pot unless combined-single-limit. MedPay and PIP are first-party on the injured person’s own policy, not the at-fault driver’s BI.
02
Do not guess the limit from the offer. A number that matches the state minimum is a tell, not proof. Florida § 627.4137: within 30 days of written request, a liability insurer must provide a statement under oath of a corporate officer, claims manager, or superintendent: insurer name; each insured; limits; any coverage defense reasonably believed available; a copy of the policy — including excess or umbrella. Ask in writing everywhere; in Florida, cite 627.4137.
03
Look up the state minimum for the at-fault policy’s effective date, then confirm on the actual policy. III’s table is still “as of December 2023” and is stale on 2025–2026 increases. Overlay (see State variation): VA 50/100/25 (on/after Jan 1, 2025) — the garage-thread $25k is the PD number; CA 30/60/15; NC 50/100/50; NJ Standard 35/70/25; HI 40/80/20; FL no compulsory BI, $10,000 PD + $10,000 PIP. Always use crash-state statute + policy effective date.
04
Stack every policy that might pay. Personal auto + household policies + umbrella/excess + employer auto if course-and-scope + garagekeepers if a shop had possession. Florida 627.4137 includes umbrella in the sworn statement. Signing a primary-only release while an umbrella sits unused is a permanent loss.
05
Split PD from BI before anyone drafts a release. A PD-only release names the vehicle/VIN and reserves BI, UM/UIM, MedPay, and PIP. A “full and final release of all claims” on a $25,000 PD check can extinguish a later fracture and UIM. UCC § 3-311 can turn a “full and final” check into accord-and-satisfaction even without a separate release.
06
Subrogation hits the same limit. If collision already paid $20,000 and PD is $25,000, that $20,000 is not extra — your carrier takes it back from the same $25,000. Net new money = limit − other claimants − collision subrogation − health-plan reimbursement − liens. The 680-upvote Reddit comment is doctrinally correct.
07
Made-whole is the default — until the contract says otherwise. Majority common law: the insurer does not take subrogation until the insured is whole (including deductible). Policy clauses and ERISA plan documents can contract around it. ERISA self-funded: US Airways v. McCutchen, 569 U.S. 88 (2013) — plan terms govern; made-whole cannot override clear reimbursement language. If the plan is silent on fees, common-fund is the default (McCutchen facts: $110,000 recovery, 40% fees, $66,000 net; plan had paid $66,866). Read the SPD and the plan document.
08
UM/UIM is often the real policy. UM pays when the at-fault driver has no (or not enough) BI. UIM pays the gap (difference-in-limits vs excess — read the form). VA UM is mandatory and cannot be reduced below liability; HI UM is included unless rejected in writing. A tortfeasor release that destroys the UIM carrier’s subrogation is a classic UIM denial. Get written consent to settle before releasing the driver.
09
Liens sit on the BI money. Hospital liens, Medicare/Medicaid, and ERISA reimbursement can consume a minimum-limits tender. Made-whole sometimes works against hospital liens and insured plans; it generally fails against a clear ERISA clause. Condition the release on written lien reductions.
10
A full release is dangerous when: treatment is incomplete; PD exceeds the PD limit; multiple injured people share one per-accident cap; an umbrella is undisclosed; UIM has not consented; a health plan or hospital has an open lien; the check is “full and final” on a disputed amount. Safer: a policy-limits release naming covered parties, limited to those limits, reserving UIM, conditioned on a sworn no-other-coverage affidavit, unsigned until liens are reduced.
11
Collectability is a separate question. Minimum-limits driver + no umbrella + no assets = the BI/PD limit is the money, plus your UM/UIM, collision, MedPay/PIP, and health. Do not burn UIM. House equity, a commercial policy, or an employer is a reason to investigate — not a reason to sign in 48 hours.
12
Your first-party file is separate (skill 1). Collision pays regardless of the other driver’s PD limit (minus deductible), then subrogates. Do not delay collision waiting on a $10,000 or $25,000 third-party tender.

04Checklists