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No Fault Serious Injury Threshold in New York Auto Insurance Policies

As a no-fault state, New York requires that all auto insurance policies provide personal injury protection (PIP) benefits, also known as first party benefits, which will cover basic economic losses such as medical expenses and lost wages in an auto accident if a claim is made, regardless of fault. However, in exchange, these policies will typically limit the right of victims to sue at-fault parties, leaving them unable to sue for compensation for either economic losses or non-economic losses. This is known as New York’s serious injury threshold or lawsuit threshold, and it’s important to understand what role it might play when considering a lawsuit after an accident.

What Is the Serious Injury Threshold?

The serious threshold is covered in New York law under NY Ins L § 5102 and NY Ins L § 5104. The latter statute states that unless certain conditions are met, an injured party will be unable to sue an at-fault party for compensation relating to basic economic losses and non-economic losses. In exchange, the law allows the injured party to receive PIP benefits from their insurer, in order to cover basic economic losses which are payable regardless of fault. If the insurer does not make these payments in a reasonable amount of time after a claim is made, then the injured party will be entitled to the right to sue their insurer for coverage.

The intent behind PIP and the serious injury threshold is to help prevent relatively minor claims from being filed in New York’s courts, and to reduce the cost of auto insurance in the state. Insurers will offer lower premium rates with policies that include the limitation as they are less likely to be sued by an injured party or their insurance company for compensation. On the other hand, victims will not face the financial and time burdens of pursuing a lawsuit in the courts when they need immediate compensation for their medical expenses.

When Does the Serious Injury Threshold Apply?

The threshold generally applies in any auto accident in which a named or unnamed individual covered by an auto insurance policy is injured and seeks damages from the at-fault party. This means that the insured, their spouse, and their children who would be covered by an auto insurance policy would not be able to sue for damages in an auto accident, even if their spouse or children do not have their own auto insurance policies.

There are many fine points of the law to consider, however. NY Ins L § 5104 names three particular circumstances in which a victim cannot sue an at-fault party or face certain restrictions.

  • If a covered driver is injured by another covered driver, the victim cannot sue the at-fault party for compensation for basic economic and non-economic losses.
  • If a covered driver is injured by a motorcyclist with proper insurance coverage, the victim cannot sue the at-fault party for compensation for basic economic and non-economic losses.
  • If a covered driver is injured by a driver or motorcyclist without proper insurance coverage, the insurer responsible for paying PIP benefits may sue the at-fault party for recovery of their expenses. The victim may not compromise this action unless they have the written consent of the insurer, the court’s approval, or have a settlement which will exceed $50,000. If the insurer is able to sue for their expenses and the victim is able to sue for excessive damages or non-economic losses, the victim will not be able to receive compensation for basic economic losses as that money was already received from the insurer.

With these conditions in mind, it is important that you speak with a legal professional after an accident. They will assist you in discovering if the at-fault party had proper insurance coverage at the time of the accident and if the injuries you sustained will meet the requirements in order to sue. They can be especially helpful when both you and your insurer are seeking compensation, as an attorney can help determine what compensation you can receive for non-economic losses and economic losses beyond those covered by your PIP benefits.

What Injuries Satisfy the Serious Injury Threshold?

As previously mentioned, certain conditions will allow an injured party to sue for damages even if the serious injury threshold applies to their cases. These conditions fall under two broad categories that can be understood as damages in excess of basic economic losses and serious injuries, and both are explained in NY Ins L § 5102 which provides definitions for basic economic losses and serious injuries.

Basic economic losses are expenses not exceeding $50,000 per injured person for the following, combined:

  • All necessary expenses incurred for any medical services, rehabilitation services, non-medical remedial care rendered in accordance with a legally recognized religious method of healing, and any other professional health services used to treat the injuries suffered in an accident. These expenses have no limitation as to time, as long as it is ascertainable within one year of the accident if further expenses may be incurred.
  • Loss of wages for work that the person would have been capable of performing if they had not been injured, up to $2,000 dollars per month for three years after the accident.
  • All other reasonable and necessary expenses incurred, up to $25 per day for no more than one year after the accident.

Basic economic losses do not include any losses incurred because of a death. However, a driver may purchase, for an additional premium, an additional $25,000 dollars which may be applied to loss of wages, and/or any therapy and rehabilitation costs after the initial $50,000.

If first party benefits are unable to cover the costs of basic economic losses, the injured party may seek compensation for the expenses incurred as a result of the incident. As previously mentioned, however, you cannot seek compensation for the basic economic losses which you have received first party benefits for.

On the other hand, serious injuries are not a matter of excessive costs for economic losses. Instead, they are personal injuries which are considered to carry such a significant non-economic loss to the victim that compensation is required and must be determined by the courts. The statute lists nine different injuries that will satisfy the serious injury threshold and allow you to sue regardless of the economic losses involved:

  • Death
  • Dismemberment
  • Significant disfigurement
  • 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 member
  • A medically determined injury or impairment of a non-permanent nature which prevents the injured party from performing substantially all of the material acts which constitute their usual and customary daily activities for at least 90 days of the first 180 days after the accident.

The first six of these injuries are fairly easy to prove. For example, it’s not difficult to determine if a death has occurred and was caused by an accident. However, the final three are more conditions caused by any number of additional injuries, and they may not be readily apparent or caused by the accident itself. The final condition especially is difficult to know as it requires an evaluation of an amount of time which may be anywhere from three to six months.

Ortiz v. Ash Leasing, Inc serves as an example of a case where a court was required to make a subjective judgment regarding the nature and cause of a victim’s injuries. The three plaintiffs had all suffered a variety injuries as a result of an accident with a vehicle owned and operated by the defendant. The plaintiff, Ortiz, suffered the worst in the form of a torn cartilage in his knee, requiring him to undergo surgery to repair the damage.

The plaintiffs submitted various medical records, attempting to convince the court that the injuries caused by the accident. The defendants submitted their own medical evidence to convince the court that the injuries were a pre-existing, degenerative condition. Unfortunately for the plaintiffs, the court came to the conclusion that the injuries were the result of a pre-existing condition. With no other issues raised that were sufficient for a trial, the court granted the defendant’s request to dismiss the case.

Bearing these uncertainties in mind, it is important that you discuss your legal options with a legal professional. An attorney who specializes in personal injuries caused by auto accidents will be able to review your documented medical conditions as a result of the injury and help you to understand if you should pursue a case. If you do decide to pursue a case, they will also be able to act as an effective legal representative for your case due to their familiarity with it.

How Does the Serious Injury Threshold Apply to My Policy?

Every auto insurance policy in New York must include first party benefits which will be payable to covered individuals in any auto accident in order to cover economic losses, regardless of fault. This means that any auto insurance policy issued in the state of New York will limit your right to sue in the aftermath of an accident. As every driver is also required to maintain proper auto insurance coverage for this vehicle, this means that most cases will have to satisfy the serious injury threshold in order to be considered.

Do be aware, however, that the legal requirement for a serious injury threshold does not apply in motorcycle insurance policies. As such, if you are injured while riding your motorcycle, you are not restricted in seeking damages for both economic and non-economic losses.

Frequently Asked Questions

Can I sue someone after an auto accident?

In most cases, you will not be able to sue. As a driver, you are expected to maintain an insurance policy for your vehicle that limits your right to sue with the serious injury threshold. That threshold can only be bypassed if you have suffered economic losses in excess of $50,000 and/or non-economic losses in connection to a set list of serious injuries.

If I’m able to sue, should I make use of that option after my accident?

It depends upon if you are suing for medical expenses, non-economic losses, or both. If you are suing for just medical expenses, consider if your health insurance and first party benefits will cover the damages. While making a claim for these injuries may result in higher premiums later on, they will provide more immediate compensation than having to work through a possibly lengthy legal process. If they will not cover your medical expenses in whole, it may be worthwhile to pursue a lawsuit to cover your remaining damages rather than simply paying out of pocket for them.

If you are suing for non-economic losses, this will depend on how strong of a case you may have. An attorney will be able to walk you through the process of analyzing your case to see if you are likely to receive the compensation you are seeking and if it will be worth the costs of going to court.

If you are considering both, then you will need to weigh both sets of concerns separately and together. It may be best to pursue only one of the two rather than attempting to lump them together, as a court may not believe that your non-economic losses justify a combined amount for settlement. If so, you may lose out on some of the compensation necessary for covering your medical expenses.

Additionally, be aware that New York is a pure comparative fault state. As such, your compensation will be limited by your own liability in an accident. This can further limit the value of going to court before factoring in the actual compensation you would seek, as there are certain costs associated with hiring a lawyer for litigation and with awaiting a legal settlement.

If I’m able to sue, how long would the process take?

This depends on the complexity of your particular case and if it goes to litigation rather than being settled out of court with the at-fault party’s insurance company. Negotiations require a collection of eyewitness testimony, police reports, and other documents relating to the incident and the insurance claims being made before talks occur. As such, pre-litigation negotiations alone can take anywhere from a few weeks to six months.

Most cases will be settled out of court through negotiations, but there are always exceptions. If your case goes to litigation, the legal process of discovery will begin as the courts attempt to discover the truth. This process may take anywhere from a few months to an entire year, and negotiations will continue during this period as cases become clearer.

Once discovery has taken place, all relevant information and arguments will be presented to a judge and jury for consideration. Your attorney will work to prove the validity and strength of your claims before an impartial set of arbitrators, and this process may take several months to a year as well. Finally, if a judgment is rendered by the court without a negotiated settlement, either party which disagrees with the ruling may appeal it to a higher court for consideration.

All in all, the settlement process could take anywhere from a few months to several years depending on the complexity of a case. However, do not be persuaded by an at-fault party or insurance company to accept a quick and easy settlement before speaking with an attorney. By accepting settlement, you give up your right to pursue further legal action in the matter, even if you are underpaid for the injuries sustained. No matter what occurs, always speak with an attorney experienced with personal injuries in auto accidents before making key decisions or signing settlement agreements.

What Should I Do if I’m Considering a Personal Injury Lawsuit After an Auto Accident?

If you or a loved one have been injured in an accident and you are not certain if your insurance policy limits your right to sue, contact Rosenblum Law for a free, no-obligation consultation today. Our experienced personal injury attorneys can analyze the situation and negotiate the best possible settlement for you. Call 888-815-3649 or email us today.

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