The collateral source rule in a personal injury action or tort claim generally prevents the admission of evidence that the plaintiff will be compensated from a source other than the defendant for his/her injuries. This rule prevents the admission of evidence, for example, that medical insurance or Workers Compensation will pay a plaintiff’s medical bills.

The idea behind the collateral source rule is that the defendant should be at fault for its actions and not avoid liability because the injured party happens to have insurance or some other payment source. Since many insurance and third party payments are subject to a lien or subrogation, the plaintiff is likely responsible for reimbursing the insurer from any damages award anyway.