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The South Carolina Collateral Source Rule

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Individuals who have suffered injuries as a result of another party’s negligence will often receive more unsolicited advice than they know what to do with. One piece of advice that is sometimes heard is that you cannot recover damages for your injuries if your insurance company or some other source is already providing reimbursement. This advice is an incorrect statement of how the “collateral source rule” is applied in South Carolina. A Columbia, South Carolina personal injury attorney explains the correct interpretation of that rule.

If you are injured in an accident in Columbia or anywhere else in South Carolina, the good news is that the state applies the collateral source rule for your benefit and not for the benefit of the negligent party that caused the accident. That negligent party cannot offset or reduce the damages that he owes you as compensation for your injuries by arguing that you will receive some indemnity or compensation from an independent source. That source must be wholly independent from the negligent party for this rule to apply. In practice, this means that if you receive compensation from your own insurance company and you have been paying the premiums for that insurance, that compensation will not be considered in determining the damages that the negligent party or his insurance company owes to you. If two or more people are jointly responsible for your damages and injuries, the compensation paid by either one of those people is not considered to be a collateral source.

Defense attorneys and insurance companies have tried to chip away at South Carolina’s application of the collateral source rule in the name of “tort reform”, but thus far, the rule remains intact. The primary argument that they have used is that the collateral source rule provides a potential double recovery windfall for an injured party. Attorneys who represent injured parties have rightly countered this argument by stating that an injured party is more entitled to a windfall on account of his injuries than a negligent party is entitled to a discount after causing those injuries.

Please contact us if you have suffered property damages or personal injuries in an accident in Columbia. We can assess the circumstances surrounding your accident and answer all of your questions about the damages that you may be entitled to receive and how payments from collateral sources will be accounted for when calculating those damages.