How Does New York No-Fault Insurance Work?

New York operates a no-fault insurance system.

There are two types of auto insurance systems in the United States: tort and no-fault. New York operates under the no-fault system for resident motorists. The laws of no-fault and tort differ quite considerably.

Settlement

In the event of an accident between drivers, regardless of who was at fault, the insurance for "first party" payments can be made up to the value of $50,000. This figure is for the purpose of paying for "economic loss." However, no-fault laws ban any legal action against the at-fault party for additional damages unless death is caused or in an unusual circumstance.

Coverage and Exclusion

Pedestrians, operators of bicycles and other road vehicles are protected, as well as the named driver and any first party named under the same household. Companies can exclude drivers who are found to have intentionally harmed themselves or found to have been driving under the influence. Committing felonies and driving stolen vehicles is also excluded.

Personal Injury Protection

"PIP" is mandatory coverage in New York and must be to the value of $50,000 to cover medical expenses and personal loss. If a person in a crash must remain in a hospital for a given length of time and must undergo physical therapy, for example, the PIP will cover the hospital stay, the therapy, any lost wages as well as other "reasonable expenses."

References

• Autoinsurancetips: Legal requirements
• New York Insurance: Article 51