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. Nonetheless, the compensation from person A's insurance company is independent from any liability B might face for causing the accident.
What Does the Collateral Source Rule Mean for My Personal Injury Recovery?
Most courts adhere to the collateral source rule. Generally, a person can recover compensation for their injuries from any person who created or caused the injury, even if they have an independent means of compensation. Thus, 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. As a result of the collateral source rule, person A can still sue person B for the $10,000. Any award for person A from person B will not be discounted, despite the $9,000 person A already received.
However, even if 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.
Do I Need an Attorney?
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 in your area will be able to adequately explain the issues and help defend your rights.