No-Fault Insurance

  1. What is the purpose of the no-fault insurance law?
    To screen "minor" suits out of the litigative process.
  2. What must the plaintiff in a personal jnury action plead under the no-fault insurance law?
    Past the no-fault threshold, i.e., there must have been a serious injury or a loss greater than basic economic loss.
  3. When does plaintiff's claim begin to run under no-fault insurance law?
    On the date of the accident.
  4. Is insurance compulsory in New York?
    Yes. The insured must purchase insurance with both the required liability coverage and the required no-fault provisions.
  5. Can parties choose to be self-insured?
    Yes. Self-insurers must comply with the requirements of no-fault coverage.
  6. What does it mean to be self-insured?
    Persons set aside their own funds to meet losses, or they will use their own funds, up to a certain amount, to cover any excess amount with insurance purchase through traditional means.
  7. What benefits does no-fault coverage provide?
    Up to $50,000 "first-party benefits" (i.e., no-fault benefits paid to the insured), plus $25,000/$10,000 minimum liability coverage if the insured is sued by a third party in a tort action.
  8. Does no-fault insurance provide coverage for property damage?
    No, but auto policis by statute must have a minimum of $5,000 liability coervage for property damage.
  9. What is the Motor Vehicle Accident Indemnification Corporation ("MVAIC")?
    An entity providing no-fault benefits to injured parties who, through no fault of their own, were involved in an accident with motor vehicles that were either uninsured, stolen, unidentified (hit and run), operated withoout the owner's permission, or unregistered.

    MVAIC also provides no-fault benefits where the vehicle is insured but the insurer denies coverage or disclaims liability.
  10. Can an injured party recover no-fault benefits through MVAIC?
    Yes, if the vehicle in question was registered in a state other than New York, or registered in New York but not covered by a liability policy.
  11. What does the no-fault isnurance law?
    Only the use or operation of a motor vehicle.
  12. Does the no-fault act cover entering or leaving, or loading or unloading, a vehicle?
    It is questionable.
  13. Who are "covered persons" under the no-fault insurance law?
    Persons injured by the insured owner's vehicle, including the owner, operator, or occupants of the insured's auto; pedestrians hit by the insured's auto; and any other person entitled to first-party benefits.

    Covered persons also include persons injured by an uninsured motorist and, outside of the state, by an insured motro vehicle (i.e., the named insured and members of her household).

    Occupants of a school bus are entitled to first-party benefits under the bus's policy, but only if covered by another policy providing first-party benefits.

    All motorcycle and ATV ("all terrain vehicle") liability policies must provide no-fault benefits to persons other than occupants of the motorcycle, another motorcycle, or any other motor vehicle for injuries arising out of use or operation of a motorcycle in New York.
  14. Who are excluded from coverage under the no-fault insurance law?
    Persons occupying another motor vehicle or motorycle.

    Any person injured: (i) by his own intentional act; (ii) while operating a motor vehicle in an intoxicated state; (iii) while committing a felony or attempting to avoid a lawful arrest by a law enforcement officer; (iv) while operating a motor vehicle in a race or speed test; (v) while operating or occupying a motor vehicle known to him to be stolen; (vi) while operating or occupying his own vehicle fo rwhich no-fault coverage is not in effect; (vii) while a pedestrian being struck by his own vehicle for which no-fault coverage is not in effect; or (viii) while repairing, servicing, or maintaining a motor vehicle and the injury occurs in business premises.
  15. What is the geographic reach of no-fault coverage?
    The use or operation of an auto anywhere in New York or in any other state.
  16. What must the coverage be with respect to a New York auto driven in another state?
    The minimum required by the laws of the other state (or Canadian province).
  17. Must ever insurer transacting business in New York or controlling or controlled by such an insurer provided minimum liability coverage and minimum first party benefits ($50,000) for any vehicle used or operated in New York?
    Yes, to cover nonresidents driving in New York.
  18. Do first-party benefits include noneconomic loss, e.g., pain and suffering?
  19. What is "basic economic loss"?
    • Medical expenses;
    • Lost earnings; and
    • Non-Income-Producing expenses.
  20. Which medical expenses can the insured party recover?
    All "necessary" medical expenses, including some forms of nontraditional treatment (e.g., chiropractic treatment, treatment administered in accordance with religions beliefs).
  21. Is there a time limit on recovery of medical expenses?
    No, as long as it can be determined wihtin one year after the accident that further expenses may be incurred.
  22. Which lost earnings can the insured party recover?
    Salaries and wages as well as reasonable and necessary expenses that the injured party may have incurred in lieu of those that she would have performed for income.

    Recovery of lost earnings is limited to $2,000 per month for not more than three years, from the date of the accident, and would not appear to extend to losss of future earnings by a covered person who is unemployed at the time of the injury.
  23. What non-income-producing expenses can the injured party recover?
    Costs incurred for such things as household services normally performed by, or needed by, the injured covered persons. Reasonable and necessary expenses are recoverable up to $25 per day for not more than one year from the date of the accident.
  24. When can an injured person collect loss incurred because of death?
    Basic econmic loss does not include any loss incurred on account of death, except that the estate of any covered person, other than an occupant of another motor vehicle or a motorcycle, may receive a death benefit of $2,000 for the death of such person arising out of the use or operation of such motor vehicle.
  25. What are possible deductions to basic economic loss?
    Yes. A covered person can receive a maximum of only 80% of his basic economic loss attributable to lost earnings (i.e., there is a 20% loss of earnings deduction).

    A collateral source deduction is allowed only for amounts recoverable on account of such injury under state or federal law providing Social Security disability benefits or workers' compensation benefits.

    There is no deduction for benefits received from Medicare, Medicaid, Blue Cross-Blue Shield, or private accident and health insurance coverage.

    There is a family deductible of up to $200 (which applies only to loss of hte named insured and members of his household). A policyholder can elect to have all or some lesser portion of medical benefits covered by his health insurer. Under such an election, the insurer must reduce automobile rates appropriately.
  26. When must first-party benefits and additional first-party benefits be paid?
    As the loss is incurred (i.e., peridoically).
  27. When must a claim be paid?
    Within 30 days after the claimant presents proof of the fact and amount of loss.
  28. What remedies does a claimant have if a dispute arises?
    The claimant can either submit the issue to arbitration or bring a contract action against the insurer to recover unpaid proceeds.

    If the arbitrator's award is $5,000 or greater, the insurer or claimant can bring a court action de novo.
  29. When can a claimant bring a court action de novo?
    If the arbitrator's award is $5,000 or greater.
  30. If a tort action is still permitted, what can be recovered?
    • Property damage claims;
    • Damages for wrongful death;
    • Economic loss not included in basic economic loss; and
    • Noneconomic loss (i.e., pain and suffering) if there is serious injury.
  31. Can a covered person sue a noncovered person for all damages?
    Yes, including basic economic loss and pain and suffering (even in the absence of serious injury). However, the insurer has a lien against recovery for all first-party benefits paid or payable by it to a covered person.
  32. When can a covered person settle with a noncovered person?
    • The covered person has written consent to do so from his insurer;
    • The settlement is approved by the court; or
    • The amount of the settlement exceeds $50,000.
  33. When is an insurer subrogated to a cause of action, to the extent of first-party benefits paid or payable to the insured?
    When the cause of action has not been commenced by its insured against an uncovered person within two years.
  34. Can an insurer who pays first-party benefits seek reimbursement by subrogation from the tortfeasor?
    No, except where the statute allows (e.g., against a noncovered person, for serious noneconomic loss, or when a no-fault insurer seeks recovery against the tortfeasor's insurer).
  35. When does a noninsured motorist have a common law cause of action against a negligent party?
    If the injuries suffered were within the statutory definition of serious injuries.
  36. Is contributory negligence of plaintiff a complete bar to recovery in negligence actions?
    No. New York had adopted pure comparative negligence. Any recovery by the plaintiff will be reduced by his percentage of negligence in the accident.
  37. Define pure comparative negligence (the law in New York).
    Any recovery by the plaintiff will be reduced by his percentage of negligence in the accident.
  38. How is recovery between insurers of two or more covered persons determined?
    Recovery is based on fault concepts. Settlement between insurers is by arbitration, not by tort action.
  39. Does a workers' compensation carrier have a lien on the proceeds of a recovery in an action arising out of an auto accident?
  40. Can a workers' compensation carrier institute an action for recovery in an action arising out of an auto accident as an assignee of the insured?
  41. Can a workers' compensation carrier recover benefits paid to a claimant from the auto insurance carrier of a negligence party under intercompany loss provisions?
    Yes, provided that at least one of the vehicles involved in the accident weighed more than 6,500 pounds or was a motor vehicle used principally for the transportation of persons for hire.
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No-Fault Insurance
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