How a Lawyer Can Maximize Your Injury Case’s Value: the Collateral Source Rule and Healthcare

This post will answer the common question, “Do I need a lawyer?” in connection to an accident case. It might be a small accident with minimal medical expenses, such as a doctor’s visit or trip to the ER. With no lingering injuries, it would look like the case is small and you can handle it by yourself without a lawyer. If you already took the initiative to call the other person’s insurance company, there’s a good chance they asked some questions about your medical treatment and offered to pay your bills. Sounds easy enough. Why bother getting a lawyer? Won’t a lawyer just take 1/3 of what? I can get 3/3 without a lawyer. That is correct and insurance companies will love you for just wanting your bills paid. While it’s true that we lawyers take our fees out of your recovery (known as a contingency fee), there is a good chance that we can the increase in recovery that we can obtain for you greatly outweighs the fee. How do we do that? Most succinctly: we know what we’re doing.

Lawyers experienced in accident cases know how to value a case and how to obtain that amount from the insurance company. For one example, my last post highlighted the diminished value claim, a cause of action in a motor vehicle accident case in addition to the personal injury and property damage. This is not a well-known claim and may be overlooked by many people. An attorney can look into it. I certainly do when I handle my clients’ cases. A client’s case is almost always worth more than his or her out-of-pocket medical bills. One reason for that is collateral source reduction.

The collateral source reduction rule in Connecticut holds that a plaintiff cannot recover what his or her health insurance (with some exceptions, notably ERISA plans) pays in medical expenses. It would appear that a case really is worth only out-of-pocket payments. Further understanding of the collateral source rule proves otherwise. Although a plaintiff cannot usually recover what the insurance company pays, the plaintiff can recover what he or she pays to to secure the healthcare (the collateral source), which are healthcare premiums and can be worth quite a deal. The true value of a case can therefore have economic damages far greater than what you paid out in healthcare expenses. When insurance adjusters offer to settle a case with you directly, they’re not including this number.

There are many other advantages lawyers have over self-represented parties including experience in prosecuting and settling injury cases. Knowledge of the law and procedure is the biggest advantage. This is an example on how that can make your case more valuable. Dealing with an insurance company yourself might sound easy enough but the adjusters are more likely slapping five with one another after you hang up rather than making arrangements to send a Brinks truck to your house.


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