No-Fault Insurance Laws in New York
New York is one of a handful of states that have implemented a no-fault insurance system for car accidents. Sometimes called Personal Injury Protection (PIP), this type of insurance pays out benefits to victims regardless of fault. In other words, you can get no-fault benefits even if you were the only person at fault for the accident in which you were injured, or if nobody was at fault. Only certain narrow groups of people cannot get no-fault benefits, such as those who:
- Caused an accident due to drunk or drugged driving
- Intentionally caused their own injuries
- Owned an uninsured vehicle
- Got injured while committing a felony or riding in a stolen vehicle
The main advantage of no-fault insurance is that a victim can quickly get certain types of compensation that they may urgently need. The main disadvantage is that a victim generally cannot sue an at-fault driver or vehicle owner unless they meet statutory requirements for going outside the no-fault system.
The Scope of No-Fault Insurance in New York
No-fault insurance addresses “basic economic loss,” which New York Insurance Law Section 5102 defines as up to $50,000 in certain types of financial losses resulting from a car accident. For example, it compensates a victim for reasonable and necessary medical and rehabilitation expenses, as well as 80 percent of their lost income (up to $2,000 per month) for up to three years after the crash. In addition, no-fault insurance provides up to $25 per day for other reasonable and necessary expenses within the year following the accident, such as household assistance and transportation costs. If a car accident claims the life of a victim, their estate can receive a $2,000 death benefit.
However, no-fault insurance does not cover non-economic damages, such as pain and suffering, emotional distress, and lost enjoyment of life. These are more subjective, less easily quantifiable forms of harm. No-fault insurance also does not cover property damage, such as repairs to a vehicle. Offsets account for benefits received through other programs, such as state workers’ compensation and federal Social Security Disability benefits.
Going Outside the No-Fault System in New York
Section 5104 of the Insurance Law provides two main situations in which a car accident victim can file a lawsuit against an at-fault driver or vehicle owner. First, they can sue for economic damages beyond “basic economic loss.” In addition, they can sue for non-economic damages if they have suffered a “serious injury.” Section 5102 defines a “serious injury” in various ways:
- Death
- Dismemberment
- Significant disfigurement
- A 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
- Non-permanent, medically determined injury or impairment that prevents the victim from doing substantially all of the material acts that constitute their usual and customary daily activities for at least 90 days during the 180-day period immediately after the accident
If a victim meets one or more of these criteria, they can file a lawsuit against an at-fault driver for damages such as pain and suffering, which can greatly increase their overall award. However, these cases tend to have higher stakes and meet stiff resistance from insurers. A victim thus may want to consider hiring an experienced car accident lawyer to help them assert their rights.
The no-fault restrictions do not apply to lawsuits against most parties other than at-fault drivers and vehicle owners. For example, if an auto defect caused an accident, a victim can sue the manufacturer responsible for the defect without meeting the Section 5104 requirements. However, their no-fault insurer will have a lien against any amount recovered to the extent of no-fault benefits that were paid or payable to the victim.
