The Collateral Source Rule
The quickest way to get a mistrial in a civil case is for a plaintiff to mention or imply that an insurance policy will cover a verdict against the defendant. Whether or not a defendant is insured has no bearing upon whether the defendant is "guilty," and if so, how much the defendant should pay. Therefore, evidence of a defendant's insurance status is inadmissible except in very limited circumstances.
In many states, the reverse is true: Whether insurance (or any other source) has paid or will pay for any of the plaintiff's compensatory damages is inadmissible under the collateral source rule. However, some states have repealed or modified the collateral source rule to do one or both of the following:
- Require that a verdict against a defendant be reduced by whatever amount that other sources have compensated the plaintiff.
- Allow the defendant to present evidence to the jury that the plaintiff has been compensated by another source.
Those who want the collateral source rule modified or repealed claim that plaintiffs get a "double recovery" if the plaintiff's health insurance company and the defendant pay for the same medical bill. Supporters of the collateral source rule point out that a defendant shouldn't get "let off the hook" because a plaintiff was lucky enough to have insurance.
Additionally, most insurance companies are subrogated, meaning that the plaintiff will have to reimburse them for their expenses.
Some people also believe it is hypocritical to prevent the jury from knowing that the defendant's insurance policy will cover a portion of the verdict but to tell the jury that an insurance policy covered a portion of the plaintiff's expenses.
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