If you’ve ever been involved in a personal injury case, you may have heard of the collateral source rule. This legal principle is designed to prevent defendants from reducing the amount of damages they owe to plaintiffs by showing that the plaintiff received compensation from other sources, such as an insurance company. Insurance companies, however, are not big fans of this rule and often work to undermine its effects in personal injury cases.
In this article, we’ll explore what the collateral source rule is, how it works, and why insurance companies may try to avoid it.
The collateral source rule is a legal principle that prohibits a defendant in a personal injury case from introducing evidence of collateral sources of 
compensation, such as insurance payments, to reduce the amount of damages owed to the plaintiff. The purpose of the rule is to prevent defendants from benefiting from the plaintiff’s efforts to obtain insurance or other forms of compensation for their injuries.
Under the collateral source rule, insurance payments or other compensation received by the plaintiff are not deducted from the damages awarded by the court. For example, if a plaintiff is awarded $100,000 in damages for a personal injury, and the plaintiff’s insurance company paid $50,000 in medical expenses, the defendant cannot reduce the damages owed to the plaintiff to $50,000 based on the insurance payment.
The collateral source rule is designed to protect plaintiffs from being penalized for obtaining insurance or other forms of compensation for their injuries. The rule recognizes that plaintiffs pay premiums for insurance coverage and that they should not be penalized for using the coverage they have paid for.
However, insurance companies may work to undermine the collateral source rule in personal injury cases. Insurance companies may argue that the plaintiff did not actually pay for the insurance coverage, or that the coverage was not intended to cover the specific type of injury at issue in the case. Insurance companies may also try to negotiate with plaintiffs to reduce the amount of damages awarded by the court in exchange for the insurance company agreeing not to seek reimbursement for medical expenses.
Medical expenses are certainly a focus in personal injury claims, but they’re not the only factor in an injury claim. The types of damages you can recover in a personal injury claim depend on the specific facts and circumstances of your case, as well as the laws in your jurisdiction. However, here are some common types of damages that may be available:
- Medical expenses: You may be able to recover compensation for the cost of medical treatment related to your injuries, including doctor visits, hospital stays, surgeries, medications, and physical therapy.
- Lost wages: If your injuries caused you to miss work, you may be able to recover compensation for the income you lost during that time.
- Pain and suffering: You may be able to recover compensation for physical pain, emotional distress, and other non-economic losses caused by your injuries.
- Property damage: If your personal property was damaged in the accident that caused your injuries, you may be able to recover compensation for the cost of repairing or replacing it.
- Punitive damages: In some cases, a court may award punitive damages to punish the defendant for particularly egregious conduct.
It’s important to note that the specific damages available in your case will depend on the facts of your case and the laws in your jurisdiction. It’s always best to consult with a qualified personal injury attorney to determine what damages you may be entitled to recover.
In some cases, insurance companies may even take legal action to recover the money they paid out for medical expenses, since ultimately, insurance companies are motivated to recover the money they paid out for medical and other expenses in order to protect their bottom line and keep premiums affordable for their policyholders, and profits high for their shareholders.
To maximize payout for a personal injury claim and to avoid issues with the Collateral Source Rule, we recommend that you retain an experienced personal injury law firm to represent your case. While a personal injury lawyer may receive a percentage of any settlement as their fee, having an experienced attorney fight your corner may often result in a much higher settlement.
Contact Kellum Law Firm at 1-800-ACCIDENT today
