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What is No-Fault and What Coverages Does It Afford in New York State?

With the increased rejection of billing by commercial insurers and government payers for treatment related in whole or in part to an auto accident, we are providing a brief primer on No-Fault insurance and the coverage that it affords to New York State insureds.

No-Fault, also known as Personal Injury Protection (PIP) coverage, is a type of car insurance in New York State (NYS) that helps pay for medical expenses, lost earnings, and other reasonable and necessary expenses stemming from a motor vehicle accident (MVA).[1]

  • The minimum amount of No-Fault coverage that must be purchased to register a car in NYS is $50,000 per person.
  • PIP coverage is primary to health insurance, which means that it pays first in the event injury is due to an MVA.
  • If the MVA occurs in NYS, PIP coverage provides benefits to both the driver and the passenger injured in your car, as well as to the pedestrian injured by your car.

What Does Basic PIP Coverage Include?[2]

  • Reasonable and necessary accident related medical and rehabilitation expenses;
  • 80% of lost earnings from work, up to a maximum payment of $2,000 per month for up to 3-years from the date of the MVA; subject to statutory offsets for NYS disability, Worker’s Compensation and Federal Social Security disability benefits;
  • Up to $25 a day, for up to a year from the date of the accident, to reimburse other reasonable and necessary expenses, (e.g., household help, and transportation expenses to/from medical treatment) resulting from the MVA; and
  • A $2,000 death benefit (in addition to the $50,000 basic No-Fault limit), payable to the estate of a person eligible for No-Fault benefits who is killed in an MVA.

Optional No-Fault Coverages—Additional PIP and Optional Basic Economic Loss (OBEL) [3]

  • Additional PIP Coverage
    • May be purchased to raise the overall limit of PIP benefits available up to $100,000 or higher and, in the process, increase the potential maximum amounts of lost earnings payments, other necessary expenses or the death benefit.
  • Unlike basic No-Fault, Additional PIP Coverage extends to all out-of-state guest occupants in your car when driving anywhere in the United States, its territories and possessions, or Canada.
  • Additional PIP coverage does not lengthen the 3-year limit within wage loss benefits are payable.
  • Additional PIP Coverage is Subject to a Subrogation Agreement.
  • OBEL
    • Insurers must offer OBEL coverage. If purchased, this coverage elevates the required basic economic loss coverage by an additional $25,000. When the basic limit of $50,000 has been reached on a claim, this $25,000 can be designated by the injured person to be applied specifically to payments for loss of earnings from work (wage loss), for rehabilitation, or to all elements of basic economic loss.
    • OBEL coverage does not lengthen the 3-year limit within wage loss benefits are payable.

Russell Friedman & Associates is not just a collection practice; we do All Things No Fault®, including consulting and compliance work. If you need help navigating the No Fault billing process or to learn more about pursuing No Fault arbitration and how the Firm can provide quality legal counsel during the process, please contact us today.

[1] Minimum Auto Insurance Requirements Coverage—No-Fault benefits—Personal Injury Protection (PIP), https://www.dfs.ny.gov/consumers/auto_insurance/minimum_auto_insurance_requirements

[2] Minimum Auto Insurance Requirements Coverage—Basic No-Fault Auto Insurance Coverage Incudes, https://www.dfs.ny.gov/consumers/auto_insurance/minimum_auto_insurance_requirements

[3] Option Auto Insurance, https://www.dfs.ny.gov/consumers/auto_insurance/optional_auto_insurance