Winkelmann v. Excelsior Insurance
This case addresses whether an insurer, having paid its insured the full amount due under a fire policy but less than the insured's total loss, may pursue the third-party tortfeasor before the insured is fully compensated. Plaintiffs Herbert and Victoria Winkelmann's building was damaged by fire, allegedly due to James Hockins' negligence. Excelsior Insurance Company paid the Winkelmanns $221,882, fully satisfying its policy obligation, but leaving a remaining uninsured loss. Excelsior subsequently settled its subrogation claim with Hockins' insurer, Colonial Indemnity Insurance Company, for $180,000. The Winkelmanns then sued Excelsior, alleging their rights were prejudiced by the early settlement. The Court of Appeals affirmed the Appellate Division's decision, holding that an insurer's subrogation rights accrue upon payment of the loss and the insurer can proceed against the tortfeasor even if the insured's losses are not fully covered. The court concluded that the plaintiffs' action against Excelsior was premature as they may still recover their remaining losses from Hockins.