What Is the Collateral Source Rule and How Does It Affect My Personal Injury Case in New York?

If you have a personal injury case in New York State, the collateral source rule prevents you from receiving “double payments” for your injuries. This means past and future payments from a third party source, like an insurance policy or disability benefits, are reduced from the monetary damages awarded by the court.

For example, let’s say the court decided to award you $20,000 in damages for your personal injury case. If your health insurance company already paid you $5,000 for medical care, the defendant’s attorney can present the insurance payment to the court. As a result, your damages would be reduced to $15,000.

When Does the Collateral Source Rule Apply?

New York applies this rule to all personal injury cases such as physical injuries like assault or battery, medical malpractice, injuries or damage to property, or wrongful death claims.

The collateral source rule applies to damages for economic damages, like medical bills, rehabilitation services, lost wages or employment benefits, or other monetary expenses paid by the plaintiff.

What is a Collateral Source in New York?

The following types of benefits generally fall into the category of collateral sources:

  • Health insurance benefits
  • Medicaid benefits
  • Workers’ compensation benefits
  • Pension benefits
  • Social Security benefits
  • State or federal assistance programs
  • Benefits received from an employer
  • Other private insurance policies

What is Not a Collateral Source in New York?

The following benefits generally do not fall into the category of collateral sources:

  • Life insurance
  • Voluntary charitable donations
  • Reimbursement specified by law or statute

How Does the Collateral Source Rule Work?

The New York collateral source rule comes into play after the trial court finds in favor of the injured party. The defendant, or the person who caused the injury, may request a hearing to provide evidence to decrease the amount they are required to pay to the injured party.

The defendant must show the court to a “reasonable certainty” that the plaintiff has already been reimbursed for an expense by a collateral source or will receive a payment or benefit by an insurance company in the future. This evidence may include records of payments from health insurance companies for medical bills or medical expenses as well as copies of health insurance policies or employment benefits that will be received in the future.

If the court determines the plaintiff already received payments for those losses from a collateral source, then the court may reduce the damages the defendant has to pay. This is done by subtracting the actual amount paid or to be paid from the amount awarded.

Should I Hire An Attorney?

The collateral source rule can turn personal injury cases in New York into complicated legal battles involving medical bills and your insurance company benefits. Working with an experienced personal injury attorney or law firm can help you navigate the collateral source rule rule and advocate for reasonable damages.

Since the defendant is trying to reduce the amount of damages you may receive, a personal injury attorney can dispute this evidence to show that you were not previously compensated or if you were only partially reimbursed for an expense.

Even though attorneys may not promise you a specific amount of money you may be rewarded, having an knowledgeable injury law attorney on your side can help you make sure your damages are properly accounted for and you receive fair compensation for your injuries.

Speak with an experienced Personal Injury Attorney Today

Injuries cost money, including time away from work, medical bills, and other complications. Before taking legal action or trying to negotiate a settlement on your own, you should talk to an attorney about your case. You can search LawInfo’s legal directory to find a local personal injury attorney to discuss the merits of your case. This one step can level the playing field, help you protect your rights, and put you in the best position for recovering the compensation that you deserve.

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