US-New YorkCan the collateral source rule reduce my damages in New York?
No, the collateral source rule in New York prevents reduction of your damages even if you received compensation from other sources like insurance.
What the Law Says
New York law explicitly preserves a plaintiff’s full damage award by prohibiting defendants from offsetting payments the plaintiff received from 'collateral sources' — such as health insurance, disability benefits, or workers’ compensation.
The collateral source rule is codified in New York’s Civil Practice Law and Rules (C.P.L.R.) § 4545. This statute allows a defendant to introduce evidence of collateral source payments only for the limited purpose of reducing the plaintiff’s award — but only after the jury has rendered its verdict and only if strict procedural requirements are met.
Importantly, the statute does not permit automatic reduction. Instead, it requires the defendant to file a pre-trial notice identifying the collateral source payments and their amounts. If the defendant fails to comply with these requirements — including serving notice at least 30 days before trial — the court must exclude the evidence entirely.
The rule reflects New York’s policy that wrongdoers should not benefit from the plaintiff’s foresight in obtaining insurance or other benefits.
Statutory TextIn any action…in which liability is admitted or established, the court shall reduce the amount of the award…by the amount of collateral source payments…
— N.Y. C.P.L.R. § 4545(a) — Reduction of awards for collateral source payments
Statutory TextThe defendant…shall serve upon the claimant…a notice specifying the amount claimed to be offset…not less than thirty days before trial.
— N.Y. C.P.L.R. § 4545(c)(1) — Notice requirement
What Courts Have Said
New York courts have consistently upheld the collateral source rule as a shield for plaintiffs — emphasizing strict compliance with statutory notice requirements and limiting judicial discretion to reduce awards.
The Court held that C.P.L.R. § 4545 does not authorize reduction of damages unless the defendant strictly complies with the 30-day pre-trial notice requirement; failure to do so forfeits the right to any offset.
The court affirmed exclusion of Medicare payment evidence where defendant served notice only 12 days before trial — underscoring that the 30-day deadline is jurisdictional, not discretionary.
What to Do
If you’re a plaintiff: Do not volunteer information about insurance or other benefits during trial — it’s irrelevant to liability or damages under the rule.
If you’re a defendant: File a timely, detailed notice of collateral source payments at least 30 days before trial — include exact amounts and sources.
Object immediately if opposing counsel attempts to mention collateral sources without proper notice or foundation.
Remember: Even if an offset is allowed post-verdict, it applies only to economic damages (e.g., medical bills), not pain and suffering.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.