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"The collateral source rule provides, as a general proposition, that a party may recover full compensatory damages from a tortfeasor regardless of the payment of any amount by any independent party (a 'collateral source'), such as an insurance carrier." Bushong v. Park, 837 A.
The new law, one of Reynolds' priorities, puts a $2 million cap on non-economic damages awarded by a jury when a hospital is involved and a $1 million cap on non-economic damages awarded against independent clinics. Reynolds signed the bill into law surrounded by lawmakers and health care professionals.
Those sources can include health insurance or property insurance, workers' compensation, Social Security disability benefits, or life insurance. Tort reform advocates oppose the collateral source rule, arguing that it encourages specious claims by dangling the prospect of double compensation.
In law, the collateral source means someone other than the defendant who pays the victim's damages. A common example is a car accident victim whose medical bills are paid by health insurance.
The purpose of Iowa's collateral source rule is to prevent a jury from reducing a tortfeasor's obligation to make full restitution for the injuries caused by his or her negligence.
Common types of collateral source income include unemployment insurance, medical insurance, life insurance, Social Security and Medicare benefits, and pensions.
Apart from insurance, collateral sources include Social Security, Medicaid, Medicare, Workers' Compensation and so on. The Collateral Source Rule also prohibits jury members from taking into account any payments other than payments from the negligent party, and that includes the plaintiff's insurance coverage.
The collateral source rule, which dates from 1854, prohibits the admission in a civil lawsuit of evidence that the victim has already received compensation from a source other than the defendant.