The warranty source rule is a law that applies to personal injury cases in Nevada . Helps victims to recover reasonably when injured. The law says that when a person is injured, they can recover the full amount of their damages from the person who hurt them, even in cases where they have insurance or other ways to cover their losses.
What is a collateral source?
When you are injured in a traffic accident, the person causing the accident pays for your losses. They are the main source of recovery. If you have another source to recoup your losses, that is called a collateral source.
In most cases, the collateral source is your own auto insurance. That is, your insurance pays you an amount for your losses, even if you look at the person responsible for your recovery first.
Nevada warranty source rule
In Nevada, a person who is hurt by someone else’s behavior has the right to collect a full recovery from the person who hurt them. This is the case even if the victim has a collateral source like insurance that will also pay them no matter what.
The person responsible for the injuries cannot inform the jury of any other method of payment the victim may have. They also cannot use those payments to reduce or compensate what they owe the victim. Rather, the victim gets a full recovery from the person who is responsible for their losses.
An example of the guarantee source rule
This can occur when a person is injured in a car accident . The accident is the fault of the other driver. The victim brings a case to recover from the other driver for his losses.
The victim has $ 50,000 in damages. While the case awaits court, the victim’s own insurance pays them $ 25,000. That leaves $ 25,000 in loss for the victim.
In this case, the victim can recover the full $ 50,000 from the responsible party. The responsible party cannot tell the jury that the victim has this insurance. Instead, the victim gets a full recovery for her losses.
What is the purpose of the guarantee source rule?
The purpose of the collateral source rule is to allow victims to obtain justice. Nevada lawmakers and courts do not believe it is fair that a person should recover less just because they make the decision to buy insurance. State law determines that the person who chooses to buy the insurance must be the one who benefits from it. After all, they found the insurance and diligently paid the premiums.
Courts believe that if a jury hears evidence about payments from a collateral source, it could skew their judgment. That is, they could leave the responsible party off the hook due to insurance even though they are at fault. Rejecting this type of evidence at trial ensures that the jury bases its decision only on the relevant facts and the law.
Workers’ Compensation Cases
A notable exception to Nevada’s guarantee source rule is for workers’ compensation cases . In a workers ‘compensation case, the jury may hear evidence that the victim has received workers’ compensation payments.
However, the court tells the jury to base the award on the total amount of the victim’s losses. The court also informs the jury that the court uses the proceeds of the judgment to reimburse the insurer or administrator for what they have already paid to the victim.
Recent Nevada Supreme Court cases continue to strengthen Nevada’s commitment to the guarantee source rule. An example is the case of Khoury 2016 . In the Khoury case, the victim was injured in an accident. Medical providers agreed to treat the victim on the condition that they be paid for the recovery of the victim’s personal injuries. This is called placing a lien on the recovery.
The medical providers then sold the liens to a third party for less than the full cost of care. The person responsible for the accident wanted to tell the jury about the lien and that the health care provider sold the lien to someone else. They said it was fair to argue before the jury that the true cost of medical care was less than the actual medical bills.
The court said that selling a lien to a third party amounts to using a collateral source for payment. As a source of collateral, it is not permissible to reduce the recovery of a part. The court went on to say that a lien could be admissible in court to argue before the jury that a doctor is biased in the case in favor of the injured person because he wants to receive a payment from the lawsuit funds.
The court said that a medical lien alone is not a source of collateral, so just the fact that the lien exists does not trigger the source of collateral rule. However, selling the lien to a third party is finding payment from a collateral source. For this reason, the evidence of selling the lien is not admissible in court.
In states that allow insurance subrogation, an insurance company that pays benefits can sue the person responsible for reimbursement of your claim. Nevada does not allow this for auto accident claims.
They say the victim can recover from both their own insurance and the responsible party.The insurance company that pays the victim has no right to recover what they pay from the person causing the accident. The case that speaks of this rule is Maxwell v. Allstate Insurance .
Why do I need a lawyer?
An attorney can help you make sure that the other party does not get away with trying to admit evidence of insurance payments or other source of collateral. They may present documents before trial to prevent the other party from mentioning an insurer or other collateral sources of payment.
The right personal injury attorney can make sure that collateral source issues don’t become an obstacle when they work together to obtain fair compensation in your case. They can also help you negotiate a fair settlement or prepare your case for trial in the best possible way. Ultimately, Nevada’s collateral source rule should work to your advantage, as it prevents responsible parties from pointing fingers in other directions.
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