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Understanding New York “No-Fault” Car Insurance Law

Posted on 07/17/23

New York is considered a no-fault insurance state when it comes to vehicle accident claims. However, many people are not quite sure what this means when it comes to an accident and their insurance. Across the country, the vast majority of states are considered fault-based or tort-based states, so we want to offer some clarifications about the New York no-fault car insurance law.

What is No-Fault Insurance?

No-fault insurance for auto accidents looks different depending on the state we are discussing. For New York in particular, every vehicle owner must provide proof of financial responsibility when they get their vehicle registered. Individuals will typically have to show that they carry no-fault insurance with a minimum coverage amount of $50,000 for every person who is injured. No-fault insurance is often referred to as personal injury protection or PIP insurance.

No-fault insurance in New York is designed so that the insurance carrier will pay for economic losses to those who sustain injuries, regardless of who was at fault for the incident. Injured individuals do not have to prove the negligence of any other party when they apply to receive no-fault benefits.

Coverage is intended to pay benefits to the following individuals:

  • A vehicle owner
  • Any passengers in the vehicle involved in the incident
  • Any members of an insured’s household if one sustains an injury as a pedestrian

The Benefit of No-Fault Insurance

Most states around the country do not have no-fault insurance. Instead, they use a fault-based system where injured victims have to prove the negligence of the other party in order to recover compensation.

One of the benefits of a no-fault insurance system is that individuals can recover compensation no matter what. Without having to prove the negligence of another party, any person who sustains an injury or other types of economic damages will be entitled to compensation. Another major benefit of no-fault insurance is that individuals typically recover compensation faster because the insurance carriers do not have to go through the process of determining fault before making a payment.

What are Some Exclusions to the No-Fault System?

No-fault benefits in New York will pay for basic economic losses sustained as a result of an injury. This includes medically necessary expenses as well as lost wages and burial expenses in the case of a death.

However, there are some exclusions to the no-fault insurance system that you should be aware of. The following are not covered by no-fault insurance in New York:

  • Motorcycle riders and passengers
  • Owners operating uninsured vehicles
  • Owners occupying or driving a spouse’s uninsured vehicle
  • Individuals who are not New York residents

Additionally, state law allows insurance carriers to make their own exclusions, so it is critical for policyholders to examine their policies and understand the various circumstances that would nullify coverage.

Do You Need an Attorney?

If you or somebody you love has been injured in a vehicle accident and are unsure about whether or not you will receive benefits, we encourage you to reach out to a New York car accident attorney as soon as possible. An attorney can offer a free consultation and help guide you toward the best path possible for recovering the benefits you are entitled to.