What is a Collateral Source?A collateral source is another way a person can receive compensation for their injuries, independent of the liability owed from the person who caused the injury. Collateral sources are typically insurance benefits arising from a health insurance policy. For example, person A may have been injured by person B in a car accident. If person A has medical insurance, the insurance company will generally pay for any medical or nursing costs associated with the car accident. The compensation from person A's insurance company is independent from any liability B might face.
What Does that Mean for my Personal Injury Recovery?Most courts in America adhere to a doctrine called the "Collateral Source Rule." Generally, a person can still recover compensation for their injuries from any person who created them, even if they have an independent means of compensation. An injured person's recovery from the person who created the injury is not reduced by any independent source of compensation.
Using the example from above, person B may be liable to person A for $10,000, but person A may receive $9,000 in compensation from their insurance company. Because of the "Collateral Source Rule", person A can still sue person B for the $10,000. Any award from person B will not discount the $9,000 person A already received.
It should be noted that, even though an injured person is not precluded from suing the person who caused the injury for the entire amount of their damages, an insurance company may be able to collect some of that award. Many insurance policies have clauses where in situations like this, the insurance company is allowed to take part of any award given to the injured person equal to the amount the insurance company paid them.
Returning to the example above, person A may have received an award of $10,000 from person B, but person A's insurance company paid $9,000 for medical expenses. If the insurance policy has such a clause, the insurance company is entitled to $9,000 from the $10,000 award from person B to person A. That means person A only gets to keep $1,000.
Do I Need an Attorney to Handle any Collateral Source Issue I Have?If you have been injured, and your award is being discounted by any insurance coverage you may have, or your insurance company is trying to collect a portion of your personal injury award, it is highly recommended that you contact a personal injury attorney with experience with insurance companies. Only an attorney will be able to adequately explain the issues and help defend your rights. |
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