How Does No-fault Insurance Work in New York?

Howard Raphaelson
Partner, Attorney
Looking At A Piece Of Paper

The answer to the question, "Is New York a No-Fault state" is yes. The way it works is that New York car owners must register their vehicle with the state in order to obtain a license plate and legally drive their car on public roads. As part of the registration process, owners must provide proof of financial responsibility. Unless they can prove they have enough money set aside to cover this responsibility out of their own pocket, they must show proof that they carry No-Fault insurance in the minimum amount of $50,000 coverage for each person who is injured. No-fault coverage is often referred to as “personal injury protection” or PIP.

Just as the name sounds, New York No-Fault law is designed so that insurance will pay for the economic losses of those who are injured no matter who was at fault for the accident. Those injured do not have to prove anyone was negligent when they apply for benefits under the policy.

There are benefits, and also limitations on benefits, some exclusions, and situations where a personal injury lawsuit may be filed against the party at fault for the accident.  Most importantly, there is a deadline by which a car accident claim with the responsible insurance company must be filed.

Benefits of New York's No-fault Law

No-fault benefits include payments for economic losses. This includes necessary expenses, which are defined as medically-related expenses, other expenses, lost wages, and burial expenses.

Medical Expenses

  • Ambulance cost.
  • Necessary x-rays, surgical interventions, and nursing care.
  • Dental costs.
  • Prescription drugs.
  • Prosthetic devices.
  • Psychiatric treatment.
  • Physical and occupational therapy.
  • Any necessary rehabilitation.
  • Any non-medical remedial care and treatment that may be chosen for religious reasons instead of medical treatment.
  • Any professional health services needed within one year of the accident if the services are required because of injuries incurred in the accident. This time may be extended in certain circumstances.

Other Reasonable and Necessary Expenses

The coverage includes payment of up to $25 a day for other expenses, such as transportation costs to travel to therapy or other medical appointments. This also includes household help if medically necessary.

Lost Wages

This benefit pays 80-percent of the claimant's lost wages. This award is not taxable, which is why 20 percent of the wages are withheld.

Burial Expenses

For anyone who died as a result of the accident, No-Fault insurance will pay for all related burial and funeral expenses.

The insurance provides coverage of a maximum of $50,000 per injured person. But, the $50,000 includes compensation received from all sources. For example, if workers’ compensation benefits are paid because of the accident, that amount will be included in the computation for the $50,000. It is not $50,000 in addition to any other benefit received. There will be an offset.

Who Can Receive No-Fault Benefits in New York?

The coverage is intended to cover the following people:

  • The owner is named as the insured on the policy covering the vehicle.
  • All passengers of the vehicle involved in the accident.
  • Any member of the named insured’s household if one is injured as a pedestrian.

There may be coverage for a member of the named household to receive benefits if that member is injured in an accident where the driver of the car they were in was uninsured.

Exclusions From Receiving No-Fault Benefits

As there is with almost every law, there are exceptions to established rules. Coverage under a no-fault policy is no different. Those who are not covered according to New York's no-fault statute include:

  • Motorcycle riders.
  • Motorcycle passengers.
  • Owners driving their own uninsured vehicle.
  • Owner’s driving or occupying their spouse’s uninsured vehicle.
  • Those who are not residents of New York.

Those who may be excluded under your own policy. The law allows private insurers to make their own exclusions, so it is very important for policyholders to review their policy, so they understand under what circumstances they may not be covered by their no-fault policy.

  • Those who are covered, but intentionally cause their own injury.
  • When the driver was intoxicated as defined by law or under the use of a controlled substance.
  • If, at the time the person who was injured was in the act of committing a felony, such as trying to escape from the police.
  • Driving or occupying a vehicle the policy owner or passenger knows to be stolen.
  • Racing or conducting a speed test.

How to File No-Fault Insurance Claims in NY

New York No-Fault regulations require a written claim with the insurer within 30 days of the accident. The claim is filed with the insurance company that covers the car involved. This time is extended rarely and only if a claimant can provide written proof that there is a “clear and reasonable justification for the failure to comply with the time limitation.”

The written statement must include as many details as possible, including the date and time of the accident. The circumstances of the accident should be provided in as much detail as possible as well as comprehensive information concerning each person who was injured in the accident.

No-Fault insurance does not provide coverage for repair of the vehicle. It only covers personal losses that those who are covered have suffered due to their injuries.

Filing a Personal Injury Lawsuit: Against Person at-fault

A personal injury lawsuit allows for the victims who have been seriously injured to seek damages for their pain and suffering. These damages are not available under No-Fault policies and require the personal injury lawsuit be filed against the driver believed to be at fault for the accident. To file a claim, victims must have suffered what New York law defines as a serious injury, which includes any of the following:

  • Death
  • Dismemberment
  • Disfigurement
  • Loss of a fetus
  • Permanent loss of a body organ or function of a bodily system
  • Bone fractures
  • One that results in essentially total disability for at least 90 days

When an Insurance Company Disputes Your Claim for No-Fault Insurance Benefits

Collecting benefits is not always as easy as it seems it would be. Insurance companies have a reputation for finding ways not to pay claims. The insurance policy may have a clause requiring disputes to be settled by arbitration. Depending on the unique circumstances of an accident, the insurance company may be sued for breach of contract or bad faith.

To learn more about New York's no-fault insurance laws, or to discuss filing a personal injury claim with an attorney, contact us online or call 212-268-3222 for a free lawyer consultation. We will help you understand your legal options after an accident, and how no-fault insurance may affect your claim.

Howard Raphaelson
Partner, Attorney
Howard A. Raphaelson founded Raphaelson & Levine Law Firm, P.C. in 1992 after graduating from the Benjamin N. Cardozo School of Law in New York City, NY. With over thirty years of experience as a personal injury lawyer, he has earned a trusted reputation from his peers, judges, and top leaders, including recognition among the top 5% injury attorneys as a “Super Lawyer” (Thomson Reuters) and “New York’s Best Lawyers” (New York Magazine).

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