Benefits and coverage under New York's "no-fault" laws for car insurance.
The *New York Comprehensive Automobile Insurance Act,* 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 amount of personal injuries claims for car accidents, as many politicians had this agenda on their platforms.
The no-fault statute was groundbreaking in that it provided for immediate payment for medical care, lost earnings and other reasonable out of pocket expenses incurred as a result of injuries from a motor vehicle accident. The law provides that these expenses must be paid up to $50,000 per person. These payments are what*s known as *first party benefits* or *basic economic loss.* The reason it*s called no-fault, is that these payments are made regardless of fault. If you lose control of your car and drive into a tree, you still get these payments.
If your medical bills, lost earnings and/or out-of-pocket expenses total more than $50,000, you can still sue the party that caused your injuries for these additional amounts (as well as for pain and suffering.) If your injuries are *serious* and caused by the negligence of another, you can still bring an action. No-fault does not cover property damage, so you still need to sue for damages to your car unless you carry *collision* or *full coverage* for your vehicle.
Who Is Covered?
*No-Fault benefits are provided for economic loss arising out of the use or operation of a motor vehicle (Insurance Law Section 5103). *Section 5102 defines motor vehicle as *all vehicles driven upon a public highway accept motorcycles.* One might imagine that motorcycles were intentionally excluded due to the frequency of accidents, which would have rendered motorcycle insurance much too expensive.
You are covered by no-fault insurance and thus what the statute calls a *covered person,* if you are the policyholder, a driver or a passenger in the vehicle or a pedestrian that is injured by the operation of the vehicle. *If you are not the policyholder and the car*s insurance is not in effect, you would be covered for the *first party* no-fault benefits under any car insurance policy in your household. For example, if your adult child in your home owned a car, it would cover you. *If there is no *household car,* there is a state fund called the *Motor Vehicle Accident Indemnification Corporation* (MVAIC) that would provide *no-fault* benefits.
There are some exclusions you should be aware of. *First off, there must be an accident. No-fault benefits will not be paid if an injury is caused by an intentional act. *Most insurance policies disclaim intentional acts, no-fault and other types of claims. *For example, you would not expect your homeowners insurance to pay for damage caused because you didn*t like your carpet anymore so you poured ink on it. *Similarly, if somebody intentionally rams into your car, the insurance will not cover the loss. Luckily, 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, you are working as an attendant in an ambulette or you are on a sales call. *In most cases worker*s compensation will pay somewhat similar benefits which will be covered in another article.
If you are the driver, and you are driving under the influence, no-fault benefits will not be paid for you, but will be paid for passengers or pedestrians that you injured. *Not surprisingly, if you are injured while committing a crime or when seeking to avoid law enforcement authorities, no benefits will be paid. Coverage will also not be afforded if you are operating a vehicle known to be stolen.
So, the plus side 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 *tort* claim for negligence against the operator that caused your injuries, you must have what the law defines as a *serious injury.* I*ll explain this in more detail later in this article.
What is Covered?
WHAT DO YOU GET IF YOU*RE COVERED?
Insurance Law Section 5102 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 so long as their occurrence was ascertainable within one year of the injury;
Loss of earnings and reasonable and necessary expenses incurred in obtaining services in lieu of those such persons would have performed for 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 following the accident.
The first paragraph outlines the types of medical treatment that are covered. *Non-medical treatments can include acupuncture and some other holistic therapies, but I wouldn*t take a risk pushing for *religious* treatments that are not widely recognized. *The benefits paid are on a *fee schedule,* and treating medical professionals cannot charge a higher fee, making it a challenge to find doctors willing to accept no-fault payments. *Most chiropractors and physical therapists gladly accept it, but specialists such as orthopedic doctors, neurologists and plastic surgeons can be hard to find.
The second paragraph allows for payment for provable lost earnings due to an accident. *If you are self-employed you can submit your tax returns to show a loss of income. You generally need to provide three years of tax returns - *two prior years showing what you usually earn and the year the accident occurred showing that you made less. If you need to hire somebody to replace you temporarily, such as somebody to drive your taxi when you own the medallion, the amount you are paying for the replacement driver can be reimbursed. Obviously, if you are working *off the books,* you cannot make a claim for lost earnings benefits.
The third paragraph offers a small amount of money which is usually used for reimbursement for taxis to medical treatment and similar costs. *You can also be reimbursed for household help if you are unable to care for your children or take care of your home (but only $25 a day.) There is an option to purchase an additional $25,000 after the $50,000 is exhausted, but very few people elect to buy this additional coverage. *Your no-fault insurance benefits will, under some circumstances, even cover you for accidents that occur in other States.
A no-fault application must be submitted to the insurance company within thirty days of the accident. *All claims must be submitted within 180 days of their date of service. Most insurance companies will pay benefits promptly. *Issues can arise pertaining to the adequacy of the proof provided, which may delay payment. *The insurance companies will sometimes claim that 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 is worthwhile to treat with medical professionals that are willing to do these arbitrations, rather than ending up responsible for payment, or with a lien on your case, should the insurance company refuse to pay. *The insurance company also has a right to have you seen by doctors that they hire to determine whether your treatment is necessary. Eventually, as your injuries improve, the insurance company*s hired doctor will *deny* your medical treatment as no longer necessary, which can also be arbitrated or litigated by the medical professional treating you.
The Serious Injury Requirement
HOW DOES NEW YORK LAW DEFINE *SERIOUS INJURY?*
The *serious injury* threshold is defined in *5102(d). Damages for pain and suffering are recoverable only if the claimant sustains injuries which result in:
Significant disfigurement; or
Loss of a fetus; or *
Permanent loss of use of a body organ, member, function or system; or *
Permanent consequential limitation of use of a body function or system; or
Significant limitation of use of a body function or system; or
Medically determined injury or impairment of a nonpermanent nature, which prevents the injured person from performing substantially all of the material, acts which 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 serious injury threshold, no matter how minor they are. *A hairline fracture of the left pinky toe will suffice, even if no treatment is required and there is no disability. *Significant disfigurement is less clear cut. Usually the issue is cuts and abrasions on the face or other visible parts of the body that result in *scars* and whether or not the remaining marks are actually disfiguring. *Case law explains that the scar must be so unattractive that the person is a target of *pity and scorn.* A mark that has to be *pointed out* will not meet the threshold.
With loss of a fetus, it must be proved that the miscarriage was actually caused by the accident. *It would not be believable to claim that a miscarriage was caused by a minor impact, especially if the woman did not immediately seek medical treatment for any injuries and lost the baby a month later. *
The *permanent loss* and *significant limitation* sections was intended to cover paralysis or other severe losses of use, but has grown to include much less severe impairments such as ligament tears and herniations of the neck and back. *There must always be objective evidence, such as MRI*s and doctor*s report to back up these claims, subjective claims of pain are never enough to meet the serious injury threshold.
The threshold is met when an injured person loses more than 90 days of work due to their injuries. *The time out from work does not have to be immediate and does not have to be consecutive. For example, a person could be out of work for a month after an accident, try going back to work, be out again, go back, have surgery and then be out again to recover. *As long as it totals more than 90 days out of the first 180 days, it meets the serious injury threshold as long as a doctor certifies that you were indeed unable to work. It is not impossible, but much more difficult to qualify under this prong without a full-time paying job, but there are some circumstances where it might apply. *For example, a homemaker with small children might be unable to provide care and need to hire childcare for her children, losing 90 out of 180 from her usual activities.
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