Understanding The Basics of No Fault Insurance in New York State

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No-fault insurance seems like a great idea on paper.  Under a no-fault system, each driver pays for their own coverage to protect them in case of an accident.  This way, your own investment in your insurance benefits you later, and you never have to rely on someone else to carry insurance.

In practice, no-fault insurance places a lot of restrictions on drivers and their right to sue.  In New York, these restrictions can stop you from claiming full compensation for your injuries and block pain and suffering damages.  To get full compensation, you may need to pursue a lawsuit – but your right to sue is also limited.  It is important to work with a lawyer to navigate the aftermath of your car accident case.

For a free case review, call our Westchester car accident lawyers at The Martello Law Firm for a free case review.  Our number is (914) 685-6950.

What Are No-Fault, PIP, and First-Party Benefits in New York?

A “no-fault” insurance system is a system where each driver carries “first-party benefits” called “PIP.”  Understanding each of these terms is important to understand how your insurance works and what claims you can file after a car accident in NY.

No-Fault

A no-fault insurance system is one where each driver carries insurance to cover their injuries after an accident.  It’s called a no-fault system because you do not need to prove fault before getting compensation from your insurance.  Your insurance should cover you regardless of who caused the accident.

No-fault systems also limit your right to sue.  Different states use different thresholds that you have to reach before you can sue.  In New York, there is a “verbal threshold,” which uses a definition of “serious injuries” that you have to meet before you can sue.

Talk to our New Rochelle car accident lawyers about your no-fault coverage and whether or not an insurance claim will be the best path to recovery in your car accident case.  Keep in mind that this no-fault system applies only to injuries, so if you are dealing with vehicle damage only, you will file an at-fault claim with the other driver’s insurance to get coverage.

First-Party Benefits

First-party insurance benefits are ones that are paid to the insurance customer directly.  With first-party benefits, the policyholder gets benefits paid to them for injuries they suffered.  Most first-party benefits are part of no-fault policies, so you do not need to prove who caused the accident before these policies pay out damages.

Many insurance systems use third-party benefits instead.  In this setup, whoever is at fault has insurance to cover the damages they caused.  There, the victim files a third-party claim with the at-fault party’s insurance.

With no-fault insurance systems like the one used in New York, paying more into your insurance for higher coverage ultimately helps you in the end.  You (and your passengers) will reap the benefits of your policy, so paying for higher insurance generally helps you if you get injured in a car crash.

First-party benefits are sometimes available even in at-fault states, so if you were an out-of-state driver injured in a car crash in New York, you might still have MedPay or a similar first-party benefit that protects you.

PIP

PIP stands for personal injury protection.  A PIP policy is a no-fault insurance policy that provides first-party benefits.  This is the type of no-fault policy that you are required to carry as a driver in New York.  That means that when we say “no-fault insurance,” we are usually talking about your PIP policy.

Under NY law, every driver is required to carry PIP coverage to cover “basic economic loss.”  Under I.S.C. Law § 5102, that’s $50,000 worth of compensation for various medical expenses and lost wages.  That includes coverage for diagnostic procedures (e.g., X-rays), psychiatric care, physical therapy, and other needs.  It also includes lost earnings from work, which can include past wages lost during recovery and future lost earning capacity.  Some other economic damages might also be included.

PIP also covers bike riders and pedestrians hit by the driver.

Limits of PIP and No-Fault Benefits in New York

It is important to understand that PIP does not cover any non-economic damages.  That means that coverage for pain and suffering is not included in a PIP claim, and you cannot get these damages paid through no-fault insurance coverage.  A lawsuit can, however, get you access to these damages – but there are other restrictions on PIP damages to be aware of.

Other restrictions may cut into how much money you ultimately receive when filing a no-fault insurance claim for first-party benefits with your PIP insurance.  Namely, § 5102(b)(1) states that PIP coverage excludes 20% of your lost wages, so you can only claim up to 80% of the wages you lose when filing an insurance claim.  Additionally, you may have to pay deductibles before you can get PIP payments, leading to additional out-of-pocket costs.

With all of these restrictions on what PIP pays, you might have to turn to an alternate route to recovery with the help of your Mount Vernon car accident lawyer.

Suing for Damages in New York’s No-Fault Insurance System

When you are covered by a PIP policy, you cannot sue unless your injuries meet the “serious injury” threshold.  This applies to both covered drivers and passengers.  Since PIP also covers cyclists and pedestrians, they face the same restrictions.

People who are covered by PIP can sue when they meet the definition of a “serious injury” under § 5102(d).  This includes any disfigurement, permanent injury, loss of a body part, broken bone, or other specific injuries listed in that statute.  Additionally, any injury serious enough to interrupt your activities for 90 of the next 180 days after the injury should also qualify as sufficiently “serious” to allow a lawsuit.

Motorcycle riders are not beholden to the no-fault system.  This usually allows motorcycle riders to sue for injuries after their accidents.

Call Our New York Car Accident Lawyers Today

If you were hurt in a car accident, call the Yonkers car accident attorneys at The Martello Law Firm today at (914) 685-6950 for a free case review.

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