New York State Auto Insurance: FAQs
Q. Do I Have No-Fault Insurance?
If you own a car registered in New York State, then you already own No-fault auto insurance (you’ll see this called “Personal Injury Protection,” or PIP, in some places). In New York, No-fault isn’t an option, it’s a legal requirement.
At a minimum, you’ll have $50,000 of PIP coverage for each person riding in your car at the time of an accident. If you or any passengers are injured in a crash, your own policy will pay for necessary medical expenses and lost wages. Note that PIP only covers costs associated with injury. You can find a guide to the most common crash-related injuries, along with their average costs, here.
For vehicle repairs, you’ll need a separate (or sometimes bundled) collision policy.
Q. What Does No-Fault Insurance Pay For?
Your no-fault insurance policy will cover:
- Necessary medical expenses (hospital bills, diagnostic tests, medications)
- Rehabilitation expenses (therapists and specialists; usually you’ll have to choose from a list of providers approved by your insurance company)
- Faith-based Treatments (New York State’s no-fault statute requires insurers to cover “non-medical remedial care and treatment rendered in accordance with a religious method of healing recognized by the laws” of New York)
- Associated losses (out-of-pocket expenses, like travel to and from doctor’s appointments)
- Lost wages (if you can’t work, your insurer will pay a portion of the wages you would have made. Usually, this is 80% of your average monthly wage, up to $2,000 a month for as long as three years. The 20% removed is meant to simulate wage tax. The lost wage benefits you receive are not considered taxable income)
- Funeral expenses (most policies in New York will pay a $2,000 benefit to cover the costs associated with death)
Your benefits will stop once you’ve reached the limit of your policy.
Q. Can My Claim Be Denied?
Not outright, but insurance adjusters (the people who review your bills and determine whether or not they need to pay) will go through your claims with a fine-tooth comb.
Your insurance company can:
- Send your medical reports out for “peer review,” in which another doctor will look over your history of treatment and determine whether or not it is truly “necessary”
- Have you physically examined by a physician that they hire. If that doctor decides that no further treatment is necessary, the insurance company can deny your benefits.
Q. Are There Accidents Not Covered By PIP?
Under certain circumstances, auto insurers are allowed to deny you the no-fault benefits you purchased:
- You were driving while intoxicated (drugs or alcohol) at the time of your crash
- You were hurt while committing a felony, like failure to stop for an officer (you must first be convicted of the crime for an insurer to legally deny you benefits)
If you were responsible for the crash, your insurer can not deny you benefits. That’s why it’s called “No-fault.”
Q. Is PIP Different From Liability Insurance?
New York is one of only 12 states with a no-fault law on the books. Everywhere else, drivers are legally required to purchase “liability” insurance. They can also purchase a PIP policy, but that’s not mandatory.
If two motorists with liability policies get into an accident, their insurance companies will independently investigate the crash and figure out which driver was “at fault.” The insurance policy of the at-fault driver will then pay for the other driver’s medical expenses and property damage (usually car repairs). To find more information on how insurers and courts use the legal concept of “negligence” to determine liability, click here.
Unless they have a PIP plan, the at-fault driver will have to pay for their own injuries out of health insurance, or file a lawsuit and argue that the insurance companies determined liability incorrectly.
Q. What If I Have Both PIP & Liability Coverage?
Generally, if another driver was injured in your crash, their medical expenses will come out of a no-fault policy first. Once that money has run out, they may come after the liability insurance you’ve been paying for. Which is fine; that’s why you were paying for it in the first place.
This works both ways. If you get hurt, and end up depleting your PIP plan, you can file a claim against the other driver’s liability insurance. It’s best to consult with an experienced attorney, who can help you argue questions of liability and make the most out of your claim, before filing one.
Q. What If They Don’t Have Insurance?
New York’s insurance laws also require motorists to purchase uninsured motorist coverage (UIM). UIM comes into play either:
- when you are injured in an accident and the other driver has no insurance (in violation of State law), or
- when you get hurt and the other driver has an insufficient amount of coverage
The State minimum for uninsured motorist coverage is $25,000 per person in the covered automobile, and $50,000 per crash.
Most auto insurers sell UIM policies that only cover accidents in New York State. You can purchase supplementary uninsured motorist coverage (SUM) that will extend your policy into other States.
Finally, UIM only covers expenses that result from bodily injury. On a positive note, an uninsured motorist policy will usually cover your medical expenses if you are struck by a hit-and-run driver.
Q. What If The Other Driver Sues Me?
Call your insurance agent immediately. Most insurers will assign you an attorney, unless you’re being sued for more money than your liability policy covers. In that case, you’ll need to hire an attorney on your own.
Q. What If I Need To Sue To Cover My Expenses?
New York State’s no-fault insurance laws allow crash victims to sue others for negligence in the event of “serious injury.”
The statute outlines 9 separate injuries that meet this requirement, although the definitions can be vague and are certainly open to interpretation.
- Dismemberment (loss of limb)
- Significant disfigurement (generally scarring. Whether or not a disfigurement is “significant” will be determined by a jury, not a physician)
- Fracture, or broken bone
- 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
The ninth “serious injury” is both the longest, and possibly the vaguest. It reads:
“Medically-determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person’s usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment.”
If you were seriously injured in a car accident, it is quite likely that your losses fit into one of these categories. In other words, you may well have the right to sue a negligent party in New York State.
But to find out, you’ll have to consult with an experienced personal injury attorney. More than that, we suggest contacting a lawyer with real trial experience in auto accident lawsuits.
Q. How Can A Crash Affect My Insurance In The Future?
First thing to remember: you’re insurance rates won’t rise automatically after an accident.
Some crashes, like fender benders that cause little to no vehicle damage, are considered so minor that an insurer won’t penalize you after you get into one. This is especially true if you have a clean driving history so far, and the adjuster determines that the accident was not your fault.
Second thing to remember: insurance companies adjust your rates, up or down, based on how much of a risk they think you are.
If you just caused a major accident, they’ll begin to think of you as a liability, and jack your rates up. Generally, your insurer will take into account the severity of your crash and the amount you claimed, and then raise your premiums accordingly.
This increase is usually called an “accident surcharge.” Most insurance companies will gradually lower the surcharge over the course of three years until you’re back at your pre-crash rate.
Q. Does New York Have Any Special Insurance Laws?
Yes, to a certain extent, New York has your back on this one. According to the State’s insurance laws, an insurer is not allowed to raise your premium if:
- total damages were less than $2,000 and no one got hurt or killed
- you filed a claim through a “comprehensive” auto insurance policy
“Comprehensive” coverage is one of the most misleading terms in the insurance industry. A comprehensive plan will cover damage to your car caused by most things but an actual collision. Think theft, vandalism and natural disasters.