Insurance Company Payments to Crime Victims in California
Payments received by a crime victim from his or her insurance company or from an independent third party for economic losses suffered as a result of the defendant's criminal conduct cannot reduce the amount of restitution the defendant owes.
In re Brittany L. (2002) 99 Cal.App.4th 1381, 1389, "The Pastores were entitled to a restitution order in an amount sufficient to 'fully reimburse' them for losses incurred as a result of appellant's criminal conduct--without regard to potential reimbursement from their homeowners' insurance carrier. A proper order thus would have included all proven losses they sustained, whether or not first submitted to their insurance carrier, and whether or not already reimbursed by their insurer.";
People v. Hove (1999) 76 Cal.App.4th 1266, 1272, defendant not entitled to reduction in amount of restitution for losses caused by his crime because victim's medical expenses were paid by Medicare and Medi-Cal;
People v. Birkett (1999) 21 Cal.4th 226, 246 "the Legislature intended to require a probationary offender, for rehabilitative and deterrent purposes, to make full restitution for all losses his crime had caused, and that such reparation should go entirely to the individual or entity the offender had directly wronged, regardless of that victim's reimbursement from other sources" .)
A crime victim who has been compensated for the same economic losses by both the defendant and his or her own insurance company may be subject to a separate claim for reimbursement by the insurer. ( 1202.4, subd. (f)(2) "determination of the amount of restitution ordered pursuant to this subdivision shall not be affected by the indemnification or subrogation rights of any third party"; see People v. Birkett, supra, 21 Cal.4th at p. 246; In re Brittany L., supra, 99 Cal.App.4th at p. 1389.)
To the extent the defendant has his or her own insurance that has compensated the crime victim for losses included in the restitution order, however, the defendant is entitled to an offset for the sums paid. (People v. Bernal (2002) 101 Cal.App.4th 155 at pp. 165, 168.)
"The defendant's own insurance company is different than other sources of victim reimbursement, in that (1) the defendant procured the insurance, and unlike the other third party sources, its payments to the victim are not fortuitous but precisely what the defendant bargained for; (2) the defendant paid premiums to maintain the policy in force; (3) the defendant has a contractual right to have the payments made by his insurance company to the victim, on his behalf; and (4) the defendant's insurance company has no right of indemnity or subrogation against the defendant.
In sum, the relationship between the defendant and its insurer is that payments by the insurer to the victim are 'directly from the defendant.'" (Id. at p. 168; accord, People v. Jennings (2005) 128 Cal.App.4th 42, 53-54 26 Cal. Rptr. 3d 709; but see People v. Hamilton (2003) 114 Cal.App.4th 932, 942-943 distinguishing Bernal but suggesting it may not have been properly decided; "we need not resolve the question of whether a payment by a defendant's insurer can be an offset to a restitution order because here the payment was not by the defendant's insurer".)
In People v. Jennings, supra, 128 Cal.App.4th 42, following the reasoning of People v. Bernal, supra, 101 Cal.App.4th 155, a divided court held that payments made by an insurance company to a crime victim to settle a civil action against the defendant, who had pleaded guilty to driving under the influence of alcohol with a great bodily injury enhancement, and the defendant's mother, both of whom were insured drivers and thus covered by the mother's automobile insurance policy, must be applied to offset the defendant's restitution obligation to the extent they covered items included in the court's restitution order.
The majority explained, "We think the relevant inquiry for purposes of Bernal is whether the defendant has obtained insurance, and is thus an 'insured' and not the manner by which the insured procured the insurance coverage or how much he may have paid for it." "Rather than try to determine how the insurance was procured, a court must determine simply whether or not the insurer's payments to the victim were made on behalf of the defendant as a result of the defendant's status as an insured." (Jennings, at pp. 56, 57.)
Justice Benke dissented, disagreeing with both the basic analysis in Bernal and, accepting for the sake of argument that Bernal was correctly decided, what she termed the majority's unjustifiable expansion of its holding to include a defendant who had not himself or herself obtained and paid for the liability insurance that funded the settlement. (Jennings, at pp. 59-62 "allowing a defendant to offset a direct restitution obligation with monies paid by his liability insurer effectively disengages the amount of direct restitution the defendant must pay from the calculation of the harm caused and thus steals from the restitution obligation its intended rehabilitative and deterrent effect".)