Everything you ever wanted to know about New York without guilt
The “New York Comprehensive Auto Insurance Law,” which most people call the “no-fault statute,” was enacted in 1973 and went into effect the following year. The purpose of the law was to limit the number of auto accident personal injury claims, as many politicians had this agenda on their platforms.
The no-fault statute was innovative in that it provided for immediate payment for medical care, lost wages, and other reasonable out-of-pocket expenses incurred as a result of injuries from a car accident. The law establishes that these expenses must be paid up to $50,000 per person. These payments are what are known as “first party benefits” or “basic economic loss.” The reason it is called no-fault is that these payments are made regardless of fault. If you lose control of your car and hit a tree, you still get these payments.
If your medical bills, lost wages, and/or out-of-pocket expenses add up to more than $50,000, you can still sue the party that caused your injuries for these additional amounts (as well as pain and suffering). If your injuries are “serious” and caused by someone else’s negligence, you can still bring an action. No fault does not cover property damage, so you should still sue for damage to your car unless you have “collision” or “full coverage” for your vehicle.
WHO IS COVERED?
“No-fault benefits are provided for economic losses arising out of the use or operation of a motor vehicle (Section 5103 of the Insurance Act). Section 5102 defines motor vehicle as “all vehicles driven on a public highway accept motorcycles” One could imagine that motorcycles were intentionally excluded due to the frequency of accidents, which would have made motorcycle insurance too expensive.
You are covered by no-fault insurance, and therefore what the statute calls a “covered person,” if you are the policyholder, a driver or passenger in the vehicle, or a pedestrian who is injured by the vehicle operation. If you are not the policyholder and the auto insurance is not in effect, you would be covered by “first party” no-fault benefits under any auto insurance policy on your home. For example, if your adult child in your household owned a car, it would cover you. If there is no “home car,” there is a state fund called the “Motor Vehicle Accident Indemnity Corporation” (MVAIC) that would provide “no-fault” benefits.
There are some exclusions that you should be aware of. First of all, there must be an accident. No-fault benefits will not be paid if an injury is caused by an intentional act. Most insurance policies waive intentional acts, no-fault, and other types of claims. For example, you wouldn’t expect your homeowners insurance to pay for damages caused because you didn’t like your carpet anymore and you put ink on it. Similarly, if someone intentionally crashes into your car, the insurance will not cover the loss. Fortunately, things like this don’t happen very often!
You are also not covered if you are in “the course of your employment.” This applies, for example, if you are driving a taxi, working as an assistant in an ambulette, or on a sales call. In most cases, workers’ compensation will pay somewhat similar benefits that will be covered in another article.
If you are the driver and you drive under the influence, no-fault benefits will not be paid for you, but they will be paid for the passengers or pedestrians you injured. Not surprisingly, if you are injured while committing a crime or while trying to avoid law enforcement authorities, benefits will not be paid. Coverage will also not be provided if you are operating a vehicle that is known to have been stolen.
So the silver lining of “no fault” is that you are automatically entitled to payment for medical expenses and many other things if you are involved in a car accident, except for the exclusions discussed above. The downside is that in order to have a negligent “tort” claim against the operator who caused your injuries, you must have what the law defines as a “serious injury.” I will explain this in more detail later in this article.
WHAT DO YOU GET IF YOU ARE COVERED?
Section 5102 of the Insurance Law defines it as $50,000 per person for:
All necessary expenses incurred for medical and related services, therapy, certain non-medical treatment by an accepted religious method, and other professional health services, as long as their occurrence can be determined within one year of the injury;
Loss of income and reasonable and necessary expenses incurred to obtain services instead of what such persons would have incurred to obtain income, up to $2,000 per month for up to three years;
All other reasonable and necessary expenses incurred up to $25 per day for not more than one year after the accident.
The first paragraph describes the types of medical treatment that are covered. Non-medical treatments may include acupuncture and some other holistic therapies, but I wouldn’t risk pushing for “religious” treatments that aren’t widely recognized. Benefits paid are on a “fee schedule” and the medical professionals they treat cannot charge a higher rate, making it a challenge to find doctors willing to accept no-fault payments. Most chiropractors and physical therapists welcome it, but it can be difficult to find specialists such as orthopedic doctors, neurologists, and plastic surgeons.
The second paragraph allows the payment of proven loss of earnings due to an accident. If you are self-employed, you can file your tax returns to show a loss of income. Generally, you must provide three years of tax returns: two prior years showing what you normally earn and the year of the accident showing you earned less. If you need to hire someone to temporarily replace you, such as someone to drive your taxi when you own the medallion, you can be reimbursed the amount you are paying for the replacement driver. Obviously, if you are working “off the record”, you cannot file a claim for lost earnings benefits.
The third paragraph offers a small amount of money that is generally used for the reimbursement of taxis for medical treatment and similar costs. You can also be reimbursed for domestic help if you are unable to care for your children or take care of your home (but only $25 per day). There is an option to purchase an additional $25,000 after the $50,000 is used up, but very few people choose to purchase this additional coverage. Your no-fault insurance benefits will, under some circumstances, even cover you for accidents that occur in other states.
CALENDAR
A no-fault claim must be filed with the insurance company within thirty days of the accident. All claims must be submitted within 180 days of your date of service. Most insurance companies will pay benefits immediately. Issues related to the adequacy of the proof provided may arise, which may delay payment. Insurance companies sometimes claim that the treatment is not medically necessary and deny payment, in which case the doctor can arbitrate this denial or sue the insurance company for payment of their bills. It pays to deal with medical professionals who are willing to do these arbitrations, rather than end up being responsible for payment, or with a lien on your case, should the insurance company refuse to pay. The insurance company also has the right to be seen by the doctors they contract with to determine if your treatment is necessary. Eventually, as your injuries improve, the insurance company’s contracted physician will “deny” your medical treatment because it is no longer necessary, which may also be arbitrated or litigated by your treating medical professional.
HOW DOES NEW YORK LAW DEFINE “SERIOUS INJURY”?
The “serious injury” threshold is defined in §5102(d). Pain and suffering damages are recoverable only if the claimant sustains injuries that result in:
Death; Prayed
Dismemberment; Prayed
Fracture; Prayed
Significant disfigurement; Prayed
Loss of a fetus; Prayed
Permanent loss of use of a bodily organ, limb, function, or system; Prayed
Consequential permanent limitation of the use of a bodily function or system; Prayed
Significant limitation of the use of a bodily function or system; Prayed
Medically determined injury or impairment of a non-permanent nature, which prevents the injured person from performing substantially all material acts that constitute such person’s usual or customary activities for not less than 90 days during the 180 days immediately following the occurrence or injury.
The first two categories above are obvious. Fractures show up on x-rays and will always meet the threshold for serious injury, no matter how minor. A small fracture of the left little finger will suffice, even if no treatment is required and there is no disability. Significant disfigurement is less clear. Usually the issue is cuts and abrasions to the face or other visible parts of the body that result in “scars” and whether or not the remaining marks are truly disfiguring. The jurisprudence explains that the scar must be so unattractive that the person is the object of “pity and contempt”. A mark that has to be “flagged” will not meet the threshold.
With the loss of a fetus, it must be proven that the miscarriage was actually caused by the accident. It would not be credible to claim that a miscarriage was caused by a minor impact, especially if the woman did not immediately seek medical treatment for the injuries and lost the baby a month later.
The “permanent loss” and “significant limitation” sections were intended to cover paralysis or other serious loss of use, but have grown to include much less serious impairments such as ligament tears and hernias of the neck and back. There should always be objective evidence such as MRIs and medical reports to support these claims, subjective claims of pain are never enough to reach the threshold for serious injury.
The threshold is reached when an injured person misses more than 90 days of work due to their injuries. The time away from work does not have to be immediate and it does not have to be consecutive. For example, a person might be out of work for a month after an accident, try to go back to work, go back out, come back, have surgery, and then go back out to recover. As long as you add more than 90 days out of the first 180 days, you meet the serious injury threshold as long as a doctor certifies that you were unable to work. It’s not impossible, but it’s much harder to qualify under this point without a full-time paid job, but there are some circumstances where it might apply. For example, a housewife with small children might not be able to care for them and need to hire childcare for her children, missing 90 out of 180 of her usual activities.