Legal & Jurisdiction
Collateral Source Rule
The collateral source rule bars reducing a plaintiff's damages by benefits they received from other sources, such as their own insurance, which is part of why subrogation exists.
Because a defendant generally cannot reduce what they owe just because the plaintiff's insurer already paid, the insurer retains a right to recover that payment from the defendant. The rule and subrogation work together to keep the ultimate cost with the at-fault party. Several states have modified the rule by statute.