New York is a No-Fault Insurance State
New York is one of twelve states, along with Puerto Rico, that follows a No-Fault auto insurance system. No-Fault is also called Personal Injury Protection (or PIP). It is designed to pay for economic losses (such as medical/health expenses, lost earnings, and other expenses related to injuries sustained), up to $50,000 per person, to the driver and all passengers injured in your car and any pedestrians injured by your car, regardless of who is at fault for the car accident. New York's No-Fault system is very complex. Here, we just touch upon the basics of this system.
New York's No-Fault auto insurance system only applies to injuries caused by car accidents. It does not apply to vehicle damage claims. No-Fault is a personal injury coverage and does not pay for auto body repair of your car or damage to any other party’s motor vehicle or other personal property. A claim for damage to (or total loss of) a vehicle can be made against the at-fault driver in New York. No-Fault is also primary to health insurance, which means it pays first in the event that injury is due to an auto accident.
Some No-Fault states allow you to opt out of No-Fault, but New York is not one of them. If you look at your New York auto insurance policy, you will notice a section called Personal Injury Protection (or PIP). This is a mandatory part of your New York auto insurance policy. A No-Fault claim is typically made through this provision of your auto insurance policy.
Purpose of No-Fault
The purpose of No-Fault is to restore individuals hurt in auto accidents to health as promptly as possible. Because of New York's No-Fault law, lawsuits due to auto accidents can only be brought about for financial losses that exceed No-Fault benefits and for non-financial damages (such as pain and suffering) only if a "serious injury" is sustained.
PIP Coverage Amounts
New York, drivers are mandated to carry personal injury protection (PIP) coverage per the state's No-Fault insurance laws. New York PIP insurance covers three things: medical costs, financial losses and death benefits. The minimum amount of PIP you can purchase in New York is $50,000, which is considered basic No-Fault coverage.
You can purchase additional PIP insurance if you would like, which is a worthwhile consideration if you can afford the costs, as medical expenses after an accident can be significant. For an additional premium, you have the option to purchase additional PIP coverage up to a maximum of $100,000 along with Optional Basic Economic Loss (OBEL) coverage of $25,000 -- bringing your total possible PIP coverage to $175,000. The amount you purchase will be the maximum you are entitled to recover with a PIP claim.
Who is Covered by PIP?
Under this coverage, your insurer provides protection against financial losses to:
- You and all relatives who reside in your household who are injured in a motor vehicle accident anywhere within the United States, its territories and possessions, or Canada.
- Any passengers who are injured in accidents in New York while in your vehicle.
- Any guest passengers who are New York State residents injured in your vehicle anywhere in the United States, its territories and possessions, or Canada, if they are not covered under another auto insurance policy in New York.
- All pedestrians injured by motor vehicles in New York State.
Basic No-Fault car insurance coverage includes:
- reasonable and necessary accident related medical and rehabilitation expenses.
- 80% of lost earnings from work, up to a max of $2,000 per month for up to three years from date of accident.
- up to $25 a day, for up to a year from date of accident, to reimburse other reasonable and necessary expenses.
- a $2,000 death benefit (in addition to the $50,000 basic No-Fault limit), payable to the estate of a person eligible for No-Fault benefits who is killed in a motor vehicle accident.
Who is Not Covered?
In most cases, the following people would not be eligible for No-Fault coverage:
- Anyone driving while intoxicated or impaired by drug use that contributes to the accident.
- Anyone intentionally causing his or her own injuries
- All terrain vehicle (ATV) or a motorcycle drivers or passengers
- Any person injured while committing a felony
- Any person injured in a vehicle known to be stolen
- An owner of an uninsured vehicle
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