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New York Insurance Coverage for Car Accidents

When a court orders that compensation be paid in a personal injury case, it is important that liable parties are able to pay the compensation owed to a victim. A courtroom victory does not matter to a victim in desperate need of financial relief, and it does nothing until that victim has actually received the settlement money.

Because of the need to ensure that victims’ rights are protected in the event of an auto accident, New York law requires that all drivers carry car insurance for their vehicles.

All states have such a mandate in place in order to serve their citizens’ needs, but New York is one of a few that enforces a no-fault law. No-fault laws, unlike normal car insurance mandates, require that all drivers carry car insurance which will also cover their own injuries regardless of who is at fault while limiting their right to sue. This law is meant to ensure swift compensation for victims while preventing unnecessary lawsuits from flooding the courts.

How Does No-Fault Coverage Work?

NY Ins L § 5103 requires that all auto insurance policies purchased by drivers include what are known as first party benefits, and NY Ins L § 5221 requires that insurers provide these benefits in their auto insurance policies. More popularly known as personal injury protection (PIP) benefits, these benefits are used to cover the medical expenses of the insured or any of their dependents as a result of an accident, regardless of who was at fault. In most other states, the insurer of a liable party would pay for expenses caused by their driver in an accident.

One must purchase car insurance if they own a car and live in the state of New York. New York law penalizes a lack of auto insurance as a traffic violation which carries a fine of up to $1,500, imprisonment for up to 15 days, and a civil penalty of $750. Additionally, if you are involved in an accident and are liable for injuries caused by it, you will have no financial support to fall back on in order to pay compensation to the victims.

For more about no-fault claims read this article.

What Accidents Do Personal Injury Protection Benefits Cover?

PIP benefits will cover a broad range of possible accidents in order to protect the state’s citizens. In general, the PIP benefits of a policy will cover personal injuries of the policy holder, their dependents, any passenger in a covered vehicle, and any New York resident who is not covered by their own personal auto policy and is injured by an insured vehicle in an accident. These personal injuries may arise out of the use or operation of any covered or uncovered vehicle within the United States or Canada.

In practice, this means that the insured and their dependents are covered regardless of whether or not they are in a vehicle when an accident occurs. New York courts have generally interpreted this to mean that PIP benefits will cover foreseeable and reasonable consequences of using a vehicle.

However, New York does not require PIP benefits to be payable to operators or occupants of motorcycles who are injured in an auto accident. Boyson v. Kwasowsky is a good case to cite as an example of this, as Boyson was technically involved in an accident with a motor vehicle. It was determined that the benefits would not apply as Boyson had been riding on her husband’s motorcycle at the time. This is also in spite of the fact that the motorcycle would not have been launched airborne and landed upon Boyson if not for hitting a truck.

Passengers may apply for PIP benefits from a driver’s insurer or from their own insurer if they have a personal auto policy. MVAIC v. Aetna Cas. & Sur. Co. allowed passengers to file a claim for PIP benefits after an accident with their driver’s insurer, and while they were denied by the insurer, it was due to the cancellation of the policy rather than the ineligibility of passengers to receive compensation. When they filed a claim for PIP benefits with the Motor Vehicle Accident Indemnification Corp (MVAIC), a state-sponsored non-profit organization which provides benefits to New York residents when they lack other options for coverage after an accident, the claim was accepted, and MVAIC was able to pursue Aetna for reimbursement of the PIP benefits.

However, if a passenger of a bus is injured, the law requires that they use their own personal auto policy to receive PIP benefits rather than seeking PIP benefits from the bus company’s insurer. A passenger may seek PIP benefits from a bus company’s insurer only when they lack a personal auto policy of their own which could provide PIP benefits.

What Expenses Will Personal Injury Protection Benefits Cover?

PIP benefits will pay for what the law calls basic economic losses that arise from an accident. This is effectively a set amount of $50,000 per person injured in an accident, which may be used to cover the costs of any the following items:

  • Medical expenses such as hospital services, surgical services, nursing services, dental services, ambulance services, x-ray services, prescription drugs, and prosthetic services.
  • Psychiatric, physical, and occupational therapy and rehabilitation.
  • Any non-medical remedial care and treatment rendered in accordance with recognized religious customs of healing.
  • Lost wages and reasonable and necessary expenses incurred as a result of obtaining services in place of one’s own work, capped at $2,000 per month for three years.
  • All other reasonable and necessary expenses incurred, capped at $25 per day for a year from the date of the accident.

Additionally, many insurers will provide options for higher coverage in the form of Optional Basic Economic Loss (OBEL) and Additional Personal Injury Protection (APIP) benefits. OBEL will provide an additional $25,000 that you may allocate to medical expenses, lost wages, a combination of medical expenses and lost wages, psychiatric therapy, or rehabilitative costs. APIP, on the other hand, is offered in increments of $50,000 to cover expenses above that of PIP.

Both of these options are excellent choices if you are able to afford them. While $50,000 may sound like a great deal of money, medical expenses and lost wages can quickly exceed the coverage provided by a basic policy that doesn’t include them.

It’s important to note that none of these forms of PIP benefits will cover what are known as non-economic losses. Non-economic losses can include things such as pain and suffering, loss of enjoyment in life, humiliation, and similar intangible costs that still weigh upon a victim’s life after an accident. In order to receive compensation for these losses, you will need to consider a lawsuit against the liable party.

Additionally, once you reach a policy’s limit, you will not be able to receive additional economic compensation from your insurer. Instead, you should speak with an experienced attorney and decide if a lawsuit will serve you needs once insurance options have been exhausted.

Can I Still Sue the Other Driver if I Have No-Fault Coverage?

New York’s no-fault law will generally prevent the use of a lawsuit by a victim to recover compensation from a liable party, using what is known as the serious injury threshold. This is because PIP benefits are meant to cover the economic expenses of the victim immediately, rather than forcing them, the liable party, and their insurers to endure months and possibly years of settlement negotiation and court litigation. However, there are two circumstances under which you are allowed to sue a liable party to recover damages.

First, if your economic expenses exceed the policy limits of your insurance meant to cover basic economic losses, then you may sue a liable party for the excess expenses. Your insurer will also most likely sue a liable party for the benefits that they paid you, but they are not required to represent you or provide you an attorney for your own proceedings. Instead, you will have to hire your own experienced legal representative to study your circumstances and present your case for settlement and litigation.

Normally, your policy’s PIP benefits will pay for $50,000 to cover basic economic losses. Until that limit is met, you cannot sue a liable party for further economic losses. However, if you have OBEL, then you must meet a threshold of $75,000 because OBEL is explicitly named as a form of basic economic loss in NY Ins L § 5102. As such, the law treats it as a form of compensation for basic economic loss and limits your right to sue because of that.

On the other hand, APIP does not affect this threshold, and you may instead sue at any time you are over the thresholds of $50,000 or $75,000 if you have OBEL. However, if you have been paid your APIP benefits by your insurer, your insurer may sue a liable party for compensation of the APIP benefits they paid you or apply a lien on any lawsuit you file against the liable party. The law recognized the insurer’s right to sue regardless of an insured’s choice to settle in Allstate Insurance Company v. Mazzola, and the right to attach a lien to a victim’s lawsuit to recover basic economic losses and APIP benefits was recognized in Aetna Cas. v. Jackowe.

You may also sue a liable party if you suffer what is considered a serious injury under New York law. This is in order to allow victims to recover non-economic losses from particularly traumatic injuries and events. All auto insurance policies’ limitation on lawsuit threshold will include the exception that an injured party may sue for non-economic losses as a result of a serious injury. Serious injuries include any of the following:

  • Death
  • Dismemberment
  • Significant disfigurement or scarring
  • Bone fracture
  • Loss of a fetus
  • Permanent loss of use of a body organ, member, function, or system
  • Permanent consequential limitation of use of a body organ or member
  • Significant limitation of use of a body function or system
  • A medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person’s usual and customary daily activities for at least 90 days during the 180 days immediately following the accident.

Of course, the last four of these categories can be rather subjective. For this reason, the courts require objective verification of your injuries by a medical professional before the trial begins. If you have experienced such an injury, it is best to speak with an attorney who will be able to help you with the medical documentation and experts necessary to present the strongest case.

Uninsured Motorist Coverage and Underinsured Motorist 

Even in circumstances where a liable party is unable to pay the legal compensation a victim is owed, there are options for receiving due compensation. All auto policies in New York are required to provide what is known as uninsured motorist (UM) coverage. This coverage protects the insured and their dependents in the event of an accident with an uninsured driver or a hit-and-run accident.

Additionally, underinsured motorist (UIM) coverage can also be purchased at an increased premium when selecting an auto insurance policy. This form of coverage is useful when suing someone who is underinsured and cannot cover the expenses they have caused because of their negligent actions.

Effectively, in cases where a liable party is unable to pay due compensation to the victim, these forms of coverage will cover the financial burden. They can pay for both economic and non-economic losses as a result of an accident.

For more about uninsured claims read this article.

Why Do I Need a Lawyer if Insurance Covers Accident Injuries?

Despite the assistance it can provide in recovering economic losses, insurance is limited in the amount of compensation it can provide and what it can provide that compensation for. When injuries occur as a result of a car accident, they often have excessive costs that go beyond medical bills. A victim may die or be disabled through no fault of their own, and they will be forced to adjust physically and mentally to the challenges of a limited life if they live.

The unfortunate truth is that PIP benefits will not cover the costs of these forced lifestyle changes. While tragic in their circumstances, such costs cannot be objectively covered by general benefits which require tangible, economic loss. Because of this, a personal injury lawsuit should be considered after any auto accident. A lawsuit may be the only way to achieve the total compensation that a victim deserves for non-economic losses.

Additionally, PIP benefits can only go so far. A policy may at minimum cover $50,000, but that money may not be enough to cover your medical expenses and lost wages. With how expensive medical care can be for severe injuries, it is important to understand that PIP benefits can run out quickly.

In yet another scenario, an insurer may attempt to deny your coverage before you consider suing a liable party. An experienced legal professional can help to determine whether or not you have a strong case for a personal injury lawsuit against a liable party.

car accident case

Case Study: $21 Million

What makes this case unique: Defense witness testified in favor of plaintiff; judge was a former Attorney General who had lost a substantial case to Mr. Rosenblum years earlier; Appellate Court actually increased the award amount. 

Who Should I Contact if I’ve Been Injured in a Car Accident?

If you’ve been injured in a car accident, contact Rosenblum Law for a free consultation today. Our experienced personal injury attorneys know how to deal with insurance companies and will make sure to get the most possible compensation for you. Call 888-815-3649 or email us.

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