Known by most as the “no-fault statute,” the New York Comprehensive Auto Insurance Act was enacted in 1973 and went into effect the following year. The purpose of the law is to limit the amount of personal injury claims for car accidents, because many politicians have this agenda on their platforms.
The no-fault statute was groundbreaking because it provided for immediate payment of medical care, loss of earnings, and other reasonable out-of-pocket expenses resulting from injuries sustained in motor vehicle accidents. The law limits these payments to a maximum of $50,000 per person. These payments are known as “first-party benefits” or “principal economic losses.” They are called no-fault because these payments are made without fault. If you lose control of your car and crash into a tree, you can still get those payments.
If your medical bills, loss of income, and/or out-of-pocket expenses total more than $50,000, you can still sue the party who caused your injury for those additional amounts (and pain and suffering). You can still sue if your injury was “serious” and caused by another person’s negligence. No fault doesn’t cover property damage, so you’ll still need to sue for car damage unless you carry “collision” or “full coverage” for your vehicle.
Who is covered?
“Provides no-fault insurance benefits for economic loss resulting from the use or operation of a motor vehicle (Insurance Code Section 5103). Section 5102 defines a motor vehicle as “all vehicles traveling on public highways accepting motorcycles.” “It is conceivable that due to the frequency of accidents, motorcycles are deliberately excluded, which would make motorcycle insurance too expensive.
You have no-fault coverage if you are the policy owner, the driver or passenger in the vehicle, or a pedestrian injured by the operation of the vehicle, and therefore what the statute refers to as an “insured”. If you’re not the policyholder and the car’s insurance isn’t in effect, you’re eligible for “first party” no-fault benefits under any car insurance policy in your family. For example, it covers you if an adult child in your family owns a car. If you don’t have a “family car,” there is a state fund called the Motor Vehicle Accident Compensation Corporation (MVAIC) that will provide “no fault” benefits.
You should be aware of some exceptions. First, there must have been an accident. No-fault benefits are not paid if the injury was caused by an intentional act. Most policies exclude intentional, no-fault, and other types of claims. For example, you wouldn’t expect your homeowners insurance to pay for damages caused by pouring ink on your carpet because you no longer like it. Likewise, if someone intentionally hits your car, insurance won’t pay for damages. Fortunately, things like this don’t happen very often!
You are also not covered if you are in the “period of employment.” This applies, for example, if you are driving a taxi, serving as an attendant in an ambulance or taking a sales call. In most cases, Workers Compensation will pay some similar benefits, which are covered in another article.
If you are the driver and you drive while intoxicated, no no-fault damages will be paid to you, but damages will be paid to passengers or pedestrians you injured. Not surprisingly, no benefits are paid if you are injured while committing a crime or while trying to evade law enforcement authorities. It also does not provide coverage if you are driving a vehicle that is known to be stolen.
So the benefit of “no fault” is that if you are involved in a car accident, you are automatically entitled to payment for medical bills and many other expenses, subject to the above exclusions. The downside is that in order to make a “tort” claim for the negligence of the operator that caused your injury, you must have what the law defines as “serious injury.” I will explain this in more detail later in this article.
What do you get if you are covered?
Insurance Code Section 5102 defines it as $50,000 per person for:
All necessary expenses incurred for medical and related services, therapy, certain non-medical and other professional health services of religious practice received, so long as such expenses can be determined within one year of the injury;
Loss of income and reasonable and necessary expenses incurred in obtaining services in lieu of services that the person would have provided for income, up to a maximum of $2,000 per month for three years;
All other reasonable and necessary expenses up to a maximum of $25 per day for no more than one year after the accident.
The first paragraph outlines the type of medical treatment covered. Non-drug treatments can include acupuncture and some other holistic approaches, but I wouldn’t risk pushing for “religious” treatments that aren’t widely recognized. Benefits paid are on a “fee schedule” and the treating medical professional cannot charge more, making it difficult to find a doctor willing to accept no-fault payment. Most chiropractors and physical therapists are happy to have it, but specialists such as orthopedists, neurologists, and orthopedic surgeons can be difficult to find.
The second paragraph allows for the payment of demonstrable loss of income as a result of the accident. If you are self-employed, you can file a tax return to show the loss of income. You will usually be required to provide three years of tax returns – the first two showing your usual income and the year of the accident showing your reduced income. If you need to temporarily hire someone to replace you, such as someone driving a taxi for you while you have the medal, you are reimbursed for the cost of the replacement driver. Obviously, if you’re working “off the books,” you can’t claim for lost income benefits.
The third provides a small amount of money, usually for reimbursement of taxi, medical and similar expenses. If you can’t take care of your kids or take care of your home, you can also get reimbursed for home help (but only $25 per day.) There is an option to buy an additional $25,000 after the $50,000 is used up, but few people choose to buy this Additional insurance. In some cases, your no-fault insurance benefit can even cover you for accidents that happen in other states.
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A no-fault claim must be filed with the insurance company within thirty days of the accident. All claims must be filed within 180 days of their date of service. Most insurance companies will pay the premium in a timely manner. Questions may arise regarding the adequacy of the proof provided, which may delay payment. Insurance companies sometimes claim that treatment is not medically necessary and refuse to pay, in which case doctors can arbitrate the denial or sue the insurance company to pay their bill. It is worth treating with a medical professional who is willing to engage in these arbitrations, rather than ultimately being responsible for paying, or putting your case on hold if the insurance company refuses to pay. Insurance companies also have the right to refer you to their own physician to determine if you need treatment. Eventually, as your injury improves, the doctor hired by the insurance company will “deny” medical care that you no longer need, which can also be arbitrated or litigated by the medical professional who treated you.
How does New York law define “serious injury”?
The “serious injury” threshold is defined in ยง5102(d). Only if the claimant suffered an injury resulting in:
death; or
dismemberment; or
break; or
severely disfigured; or
loss of fetus; or
Permanent loss of use of a bodily organ, organ, function or system; or
A permanent consequential restriction on the use of a bodily function or system; or
Significantly limited use of bodily functions or systems; or
A medically determined non-permanent injury or impairment which, within 180 days of occurrence or injury, renders the injured person unable to perform substantially all materials and acts that constitute the person’s daily or customary activities for a period of not less than 90 days.
The first two categories above are obvious. Fractures show up on x-rays and no matter how minor they are, they reach the threshold of serious injury. Even if no treatment is needed and there is no disability, a hairline fracture of the left little toe is sufficient. Obvious disfigurement is less obvious. Often the question is whether cuts and abrasions on the face or other visible parts of the body result in “scarring,” and whether the remaining marks are truly disfiguring. Case law explains that a scar must be so unattractive that the person is the target of “pity and contempt”. Flags that must be “pointed out” will not meet the threshold.
To lose a fetus, it must be proven that the miscarriage was indeed accidental. Claims that a miscarriage is caused by a minor impact are implausible, especially if the woman miscarries a month later without immediate medical attention.
The “permanent loss” and “serious limitation” sections were designed to cover paralysis or other serious loss of use, but have grown to include less serious injuries such as torn ligaments and neck and back hernias. There must always be objective evidence such as MRIs and physician reports to support these claims, and subjective claims of pain are never sufficient to meet the threshold for serious injury.
The threshold is reached when an injured person is out of work for more than 90 days as a result of the injury. Off hours don’t have to be immediate, nor do they need to be consecutive. For example, a person may be out of work for a month after an accident, then try to go back to work, go out again, go back again, have surgery, then go out again to recover. As long as a total of more than 90 days in the previous 180 days, you meet the serious injury threshold as long as your doctor certifies that you are genuinely unable to work. It’s not impossible, but harder to qualify without full-time paid employment, but it may apply in some cases. For example, a housewife with young children who may not be able to provide care and needs to hire child care for her children loses 90 out of 180 of her daily activities.
