At Washington Injury Law, our experienced Seattle car accident attorney represents people who were harmed by the reckless and negligent behavior of others. One of the first questions that usually comes up involves how medical bills get paid, who covers ongoing treatment, and how insurance affects your settlement.
Many people worry that if their health insurance has already paid some of their medical bills, the at-fault party will get a discount on what they owe. This is precisely what Washington State’s collateral source rule addresses.
In simple terms, the at-fault driver, business, or property owner doesn’t get to benefit from payments you received from your health insurance, disability benefits, or other third-party sources. If you’ve been researching and wondering “what is the collateral source rule?”, this guide breaks it down in plain language, explains how Washington applies it, and shows how an attorney can protect your full right to compensation.
What Is Washington’s Collateral Source Rule?
The collateral source rule in Washington is a legal doctrine that prevents negligent parties from reducing the amount they owe by pointing to payments or benefits the injured person already received from another source. In other words, just because your health insurance paid part of your medical bills doesn’t mean the at-fault party gets to pay less.
Many states limit the collateral source rule, allowing defendants to argue that an injured person’s damages should be reduced because insurance or other benefits already covered some of their costs. Washington State takes a more protective approach for injury victims. Under the Washington Revised Code, here’s what the collateral source rule does:
- Prevents the at-fault party from reducing what they owe by pointing to insurance payouts.
- Excludes evidence of insurance payments during trial.
- Ensures full compensation for injured plaintiffs.
- Encourages responsible behavior by holding negligent parties fully accountable.
So when someone asks, “Is Washington state a no-fault state?” or wants to understand the rules on damages, it helps to know that the collateral source rule ensures that at-fault parties are still responsible for the full value of the injuries they cause.
The Collateral Source Rule in Washington
The Evergreen State takes a fairly strict approach to the collateral source rule. Under civil jury instructions, the Washington State Supreme Court ruled that whether a plaintiff has insurance or other means to cover personal injury losses is irrelevant and that defendants cannot use it as evidence. This prevents juries from reducing awards based on incorrect assumptions about your financial situation.
Examples of collateral sources in Washington that the defendant cannot use to reduce damages:
- Health insurance benefits;
- Property insurance payouts;
- Workers’ compensation payments (with some exceptions);
- Social Security disability benefits;
- Life insurance benefits.
The collateral source rule applies to many types of payments, but there are exceptions. Some insurers, particularly health insurance companies, have a legal right to seek reimbursement through subrogation if they paid for your treatment and you later receive a settlement.
There are also categories of payments that Washington law specifically excludes from reductions under the collateral source rule. This includes industrial insurance payments, Medicare payments, and payments to injured firefighters under Section 41.04.510 of the Washington Revised Code.
These rules exist to make sure that those who cause personal injuries are held fully accountable. Without them, at-fault parties would essentially receive a financial “reward” because the injured person had the foresight to maintain good insurance coverage.
Subrogation is the other side of the coin. For example, if your health insurance pays $20,000 toward your injuries and you later receive compensation from the at-fault driver, your insurer may request reimbursement for the amount they paid. This happens behind the scenes and does not reduce the amount you can claim from the defendant. It simply ensures that insurance companies get paid for the costs they cover.
What the Collateral Source Rule Means for Injury Victims in Washington
Understanding the collateral source rule helps injured people see why it’s such an important protection. Without it, many victims would receive far less than what they actually need, especially in cases involving serious or long-term injuries.
The rule also ensures that negligent parties, not innocent victims, bear the full financial responsibility for the harm caused. It supports fairness, holds wrongdoers accountable, and encourages responsible driving, business practices, and property maintenance.
Ways the collateral source rule impacts your Washington injury claim:
- You can claim full medical expenses, even if part was paid by insurance.
- Defendants cannot introduce evidence of your insurance benefits in court.
- You may still need to handle subrogation, but a lawyer can manage it.
- Your overall settlement value is typically higher than in modified states.
- You receive compensation for all categories of damages, including pain and suffering.
These damages may include all medical care associated with your injuries, lost income, diminished earning capacity, out-of-pocket expenses, emotional harm, loss of enjoyment of life, and more. Washington’s approach allows victims to recover financial support that reflects the true cost of what they’ve endured, not just whatever remains after insurance pays.
Because this rule can be misunderstood or misrepresented by insurance adjusters, having legal help is crucial. Insurers may try to convince victims that their bills “have already been covered,” using confusion about the collateral source rule in Washington to justify lower offers. Don’t fall for it.
Contact an Experienced Seattle Car Accident Lawyer to Protect Your Rights
If you or a loved one was injured because of someone else’s negligence, understanding the collateral source rule in Washington can make a major difference in the compensation you recover. The rule is designed to protect victims, but only if you know how to apply it and avoid insurance company tactics meant to reduce your settlement.
Washington Injury Law represents injury victims throughout King County, including the communities of Downtown (98101), Capitol Hill (98102), and Rainier Valley/Beacon Hill (98144). We investigate the facts, gather medical documentation, manage subrogation issues, and fight for the maximum compensation you deserve. To get our experienced Seattle car accident lawyer on your side, call or contact us online to schedule a consultation today.