An explanation of New York�s no-fault law and motor vehicle PIP

							An explanation of New York’s no-fault law
and motor vehicle PIP insurance benefits
What is the New York                             shown below are subject to a combined limit     What are Additional
no-fault law?                                    of $50,000, while the limit of the fourth is
                                                 in addition to the $50,000 limit.
                                                                                                 PIP benefits?
The New York Comprehensive Auto-                                                                 Additional PIP coverage broadens
mobile Insurance Reparations Act (also           1. All eligible medical expenses incurred       the protection in two distinct ways. First,
known as the no-fault law) took effect on            without time limitation.                     it expands the definition of eligible injured
Feb. 1, 1974. Legislators wanted to ensure                                                       person to include passengers who are not
                                                 2. Income loss payments up to $2,000 per
that persons injured in an auto accident                                                         residents of New York state when injured
                                                    month for no more than three years.
would receive prompt and sufficient medical                                                        outside the state. Second, it adds another
treatment and income replacement without         3. Other expenses incurred                      layer of limits (each of the four categories of
the burden of litigation. Prior to no-fault,        (e.g., housekeeping or transportation) up    Basic Economic Loss) to be paid as Extended
only 14 percent of the liability premiums           to $25 per day for not more than one year.   Economic Loss. The limit combinations
in the state actually reimbursed accident                                                        that are available for you to choose from
                                                 4. Death benefit of $2,000 payable
victims for their economic loss, and the                                                         may vary by insurance company, since each
                                                    to the covered person’s estate.
average time to collect was 16 months.                                                           company is permitted to file its own group
                                                 Keep in mind that, while eligible injured       of optional limits. While most insurance
The no-fault law provides a generous
                                                 persons are guaranteed this Basic Economic      companies offer additional PIP coverage,
package of Personal Injury Protection
                                                 Loss, it may not all be payable as PIP          they are not compelled to offer it by law.
benefits and finances it with the removal
                                                 benefits. There could be other sources, such
of excessive pain and suffering damages,
wasted litigation expenses and redundant
                                                 as workers’ compensation, state disability
                                                 or Social Security benefits, which may
                                                                                                 What other PIP options are
benefits payable under other social programs
(for example, workers’ compensation and
                                                 contribute with your auto insurance to help     typically available?
                                                 compensate you for Basic Economic Loss.         • If your employer has a Qualified
Social Security). As a result, covered persons
injured in an auto accident give up some                                                           Wage Continuation Plan (meeting
of their rights to sue for noneconomic           What are Optional Basic                           specific requirements detailed in the
                                                                                                   no-fault law), you could be eligible for
(e.g., pain and suffering) damages in
exchange for guaranteed benefits that are         Economic Loss benefits?                            a premium discount.
paid promptly regardless of fault. However,      OBEL adds an additional $25,000 to the
                                                                                                 • Insurance companies must offer the
if the injury is severe enough to reach a        $50,000 Basic Economic Loss for a total of
                                                                                                   choice of a family deductible in the
“verbal threshold,” which is a list of nine      $75,000, but with a twist. Instead of this
                                                                                                   amount of $200; they also may offer
injury types, an injured person may then         amount being paid to the party who first
                                                                                                   the choice of a $100 family deductible.
pursue noneconomic damages.                      demands it (e.g., the hospital), you can
                                                                                                   You will lower your premium by selecting
                                                 decide who gets access to it first. You may
                                                                                                   these deductibles.
                                                 want the $25,000 to go toward the payment
What are Personal Injury                         of income loss, or you may want to use it for   • You may name an individual
Protection benefits?                              psychiatric, physical or occupational therapy     (e.g., a nanny) to be eligible for coverage
                                                 and rehabilitation.                               in the same manner as you for a small
PIP benefits emerge from the legislators’
                                                                                                   additional premium.  continued on back
promise of Basic Economic Loss for eligible
injured persons, which consist of four types
            of compensation. The first three

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For what types of vehicles                is required for motorcycles and all-terrain
                                          vehicles, but it applies only to injured
                                                                                           municipally owned vehicles and other
                                                                                           vehicles not requiring registration.
are the recovery of                       pedestrians. The right to noneconomic
                                                                                           This information is provided as a general
noneconomic damages limited               damages is restricted for all persons eligible
                                          for PIP benefits, except when the accident
                                                                                           summary of the no-fault law and PIP coverage.
and PIP coverage required?                involves an ATV. The no-fault law does
                                                                                           Please consult the actual law and your insur-
                                                                                           ance policy for specific details that may be
Every motor vehicle insurance policy      not apply to mobile equipment, farm
                                                                                           applicable to your situation.
(whether personal or commercial) must     equipment, snowmobiles, street cars,
provide these PIP benefits. PIP coverage