Understanding The Basics of No-Fault Insurance In New York State

Those who’ve been in a car accident understand the struggle of dealing with insurance companies, car repairs, and personal injuries afterward. In the state of New York, individuals who get into car accidents fall under the state’s “no-fault” law. In a no-fault state, each party and their insurance company is responsible for the cost of damages to their own property, but things can get tricky. We’ll explain more below.

Is New York a No-Fault State?

Following a car accident, you may be able to collect compensation for lost income, medical expenses, and other intangible losses. Did you know that this process varies based on what state you live in? That’s why navigating a post-car accident compensation in New York involves understanding its “no-fault” status. In the state, victims can seek recompense without determining fault.

Unlike fault states where the responsible party covers losses, New Yorkers file personal injury claims with their own insurers for medical expenses and damages. 

There are two types of compensation systems in the United States for auto accidents: fault and no-fault. New York is a “no-fault” state, meaning that you do not need to rely on an insurance carrier to determine fault to collect on a claim.

Fault versus No-Fault States

In reference to auto claims, states fall under either a fault or a no-fault compensation system. In a fault state, the driver who caused the accident is responsible for paying for any incurred losses the other driver suffered. This could include either economic or noneconomic damages.

If the other driver was at fault, you will file a third-party claim with that driver’s insurance company. This is referenced as a third-party claim because you are filing a claim with an insurance company even though you are not a policyholder.

Once your claim is filed, the third-party insurer will probably assign an adjuster to investigate your case. If your claim is accepted, the insurance carrier will cover your medical expenses and vehicle damage up to the insured’s policy limits.

In a no-fault system, such as exists in the state of New York, a victim of a car accident would file a claim through his or her own auto insurer. In no-fault states, each driver will have to file a claim for losses through his or her own respective insurance.

New York Minimum Insurance Requirements

PIP Coverage

Since New York is a no-fault state, insurance companies require drivers to carry Personal Injury Protection (PIP), also referred to as “No-Fault Coverage.”

PIP will cover medical expenses, lost wages, and other necessary expenses related to injuries for yourself and your passengers, regardless of who was at fault. However, PIP will not pay if you were found drunk driving.

In New York, PIP coverage covers the following:

• Reasonable and necessary medical and rehabilitative costs;
• 80% of lost earnings from work, up to a maximum payment of $2,000 per month, for three years after the accident;
• Up to $25 per day for up to a year from the date of the accident to reimburse other reasonable and necessary expenses;
• Basic no-fault limit of $50,000 per person; and
• A $2,000 death benefit (in addition to the $50,000 basic no-fault limit), payable to a person’s estate if they die from the accident.

Liability Coverage

New York drivers are still required to buy liability insurance in the event that a third-party claim is filed with your insurance company. This coverage will kick in if the car accident results in serious injuries, death, or damage to another’s property.

Minimum liability coverage is:

• Bodily injury liability insurance of $25,000 per person/$50,000 per accident;
• Property damage liability of $10,000; and
• Wrongful death liability insurance of $50,000 per person/$100,000 per accident

Given these coverage amounts, New York minimum liability limits are sometimes referred to as “25/50/10.”

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The Benefits of No-Fault Insurance In New York

No-fault insurance was designed to protect the insured. No matter who caused the accident, no-fault insurance guarantees that both parties will receive reimbursement for their own damages if they carry personal car insurance. In addition to property damage, no-fault insurance also helps the insured to obtain repayment for medical bills, loss of wages, and medical equipment. In New York, individuals can receive up to $50,000 for these expenses.

Who Receives the Benefits of No-Fault Insurance?

New York state laws outline who receives the benefits of no-fault insurance in the case of an accident. According to the law drivers, passengers, pedestrians, and cyclists all benefit from no-fault insurance. Furthermore, to receive the benefits of no-fault insurance, the accident must occur in New York and the vehicle/driver involved in the accident must have an insurance policy issued in the state of New York. It’s also important to note that motorcycles and motorcyclists are not covered under no-fault insurance laws.

Filing a No-Fault Insurance Claim

Anyone who is involved in a car accident in the state of New York and wants to file a no-fault insurance claim must follow a specific process. It’s important to follow the exact requirements to file a claim or coverage that could be denied. The basic requirements of filing a no-fault claim in New York are:

• Submit the no-fault application (Form NF-2)
• File the claim application within 30-days of the accident
• Notify the New York State Motor Vehicle Accident Indemnification Corporation

Following these simple steps after an accident helps ensure coverage by the insurance company. Drivers who are in an accident and unsure of the proper steps to take can consult the local authorities, their insurance agent, or a trusted attorney.

Can I Sue the Other Driver in a No-Fault State?

No-fault states are designed to protect you from being sued or from suing others following a car accident.

In pursuing litigation, you are essentially leaving the no-fault system. Although you may think filing an insurance claim is sufficient, you may want to consider taking the other driver to court for any of the following reasons:

• If your medical bills exceed your PIP coverage; or
• If you suffer a serious injury

New York allows an injury victim to pursue a fault-based system if his or her injuries are deemed “serious” under the law. Let’s discuss what qualifies as a “serious” injury.

New York law classifies a “serious” injury to be:

• Dismemberment;
• Significant disfigurement;
• Bone fractures;
• Loss of a fetus;
• Permanent loss of a bodily function or system (i.e., blindness or a neurological disorder);
• Limitation of a bodily function;
• Permanent loss of a body part or organ;
• Injury or impairment that prevents a person from performing normal daily activities for at least 90/180 days following an accident or injury; or
• Death.

If you have suffered a “serious” injury, you will also be eligible to recover for noneconomic damages, such as pain and suffering. If you decide to take legal action, this will be a private lawsuit not involving your insurance company.

If a car accident victim dies, the personal representative of the decedent’s estate will be able to file a wrongful death suit. The personal representative must take legal action within two years of the injured party’s death before the limitation period ends.

Types of Damages in New York Auto Accident Cases

In a New York automobile claim, you can recover economic damages. Economic damages are easily quantifiable and result in direct financial losses or costs. These damages are easy to calculate because they are accompanied by pay stubs or invoices.

In a car accident claim, economic damages may include:

• Lost wages
• Reduced earning potential
• Past and future medical expenses
• Cost to repair your vehicle
• Transportation costs

However, noneconomic damages are intangible losses that impact your quality of life. You may have a more difficult time recovering these damages, and if it often becomes necessary to take your case to court.

In New York, noneconomic damages in a car accident case may include:

• Pain and suffering
• Scarring or disfigurement
• Mental anguish
• Loss of consortium
• Loss of companionship

Uncovered No-Fault Accident Expenses

People who are physically or mentally suffering after an accident still may need to file a personal injury lawsuit to obtain a settlement. It’s recommended that your claim is handled by a top accident lawyer in New York to assure you get the best result possible.

We have a team of lawyers ready to assist you with your personal injury claims. To learn more about your legal options related to car accidents, personal injury, and pain and suffering talk to the experienced attorneys at The Barnes Firm. We will assist you with all of your legal needs and help you win the best result possible.

The Barnes Firm (800) 800-0000

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