Most New Yorkers are fully aware that New York state is a no-fault state; however not many people fully understand what that really means. Here is a brief description of what no-fault means for you. As always, feel free to contact one of our friendly and knowledgeable agents for more information.
What is no-fault insurance?
This applies to the personal injury protection PIP portion of your auto insurance. PIP covers medical expenses if you are in an auto accident. In a state with no-fault insurance laws, you file a claim for covered expenses with your auto insurance company if you are in a car accident; whether you are at fault or not. Along with collecting from your own insurer (regardless of fault), no-fault insurance restricts your right to file a lawsuit.
In New York it is mandated that motorists are required to hold at least 25/50/10 coverage. A minimum amount of: property liability insurance – $10,000; bodily injury to one person – $25,000, and bodily injury to all people, and property damage – $50,000. There is also a mandatory additional coverage of $50,000 applies for all New Yorkers. The reason behind this is due to the fact that no-fault also entails coverage for damages done to all vehicles involved, as well as the medical costs for all parties involved in the accident.
New York Residency vs. Non-Residency
Every insurance company who insures New York drivers is legally obligated to partake in the no-fault insurance program. For customers this means they are automatically covered for their medical bills. The New York no-fault insurance program offers medical care for treatment of injuries while safeguarding against lawsuits based solely upon ‘pain and suffering’ cases that do not involve any serious injuries.
Out of state drivers who have been involved in an accident with an in-state vehicle, while driving in the state of New York are also bound to the no-fault program. For example, lets say a couple from Ohio are involved in an accident on Route 17 with an in-state commuter. The no-fault insurance program will only apply to the Ohio couple if their auto insurer is a national company who sells policies in New York. Regardless of the Ohio couples policy, their insurer will still be required to cover the costs of medical expenses resulting from the accident. “Regulation 68, as noted in the 2007 Consumer Guide to Auto Insurance, states that No-Fault Benefits-Personal Injury Protection (PIP), under the coverage of the insurer, covers the driver and passengers for the costs of all damages resulting from an accident.”
Why is No-Fault so Special?
The basic concept behind no-fault is to avoid a multitude of small claims cases that would otherwise overwhelm the courts, as well as ensuring prompt and timely payment of accident-related claims. There are certain thresholds in policy maximum payouts that must be met prior to suing the other party; therefore less court cases exist.
Can I still sue the other party?
There are two ways that the state determines whether a lawsuit can proceed or not. The two thresholds are verbal and monetary. A verbal threshold pertains to a specific type of injury. A Monetary threshold pertains to a specific dollar amount. If the policy maximum “threshold” has been met, you may still sue for reimbursement of actual damages, such as ongoing medical bills. Pain and suffering may or may not be excluded.
Why Uninsured/Underinsured coverage is still very important.
As previously mentioned above, New York state requires a driver to carry extremely minimal coverage of 25/50/10. The minimum we recommend in coverage is 100/300/100, with a preferred recommendation of 250/500/100. As you can see, those are VERY different figures. According to recent data, 1 in 7 drivers on the road are uninsured, while the number of minimum coverage drivers is much higher. If you think about it this way, buy giving yourself added protection against these drivers, your policy may pay out for your lost earnings and any pain and suffering compensation that would otherwise not be paid. It also isn’t beneficial to rely on your health/medical insurance in an accident. These policies tend to have large deductibles, policy caps, and may not cover everything you need. Lastly, try to imagine the type of reckless and careless person who would not have insurance for their vehicle. Now imagine trying to get a penny out of this person in a lawsuit. The odds are probably not in your favor. Take the initiative to protect yourself today, instead of regretting an accident tomorrow.
If you would like further information regarding your auto coverage, contact one of our insurance experts today. We can also provide you with a no-obligation quote to compare against your current coverage.