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How Does a Car Accident Claim Work?

New York is one of about a dozen states that have “no fault” car insurance laws. No fault insurance means that a driver’s own auto insurer will pay some or all of the legitimate crash related medical expenses, past and future lost wages, other medically-necessary expenses, and incidental costs of that driver if he or she ever gets into a car accident, regardless of who was at fault for the accident.

A no fault insurance claim is sometimes called a Personal Injury Protection claim or PIP claim.

Under no-fault insurance, a driver must first look to his or her own car insurance policy to get compensation for medical treatment, lost income and other legitimate economic losses resulting from the accident. For minor injuries, the claim is typically resolved with the driver’s own insurance carrier no matter who caused the accident. There is no compensation for non-economic damages, which includes pain and suffering.

New York State law requires that motorists carry a minimum amount of liability insurance of $25,000 for bodily injury to one person, $50,000 for bodily injury to all persons, and $10,000 for property damage in any one accident.

If expenses exceed the $50,000 available under No-Fault, a person may apply for Additional No-Fault (Additional PIP) benefits either from the vehicle they were in or any auto policy of a related household member. If no Additional PIP benefits are available, a claim may be made to standard health insurance to pay for medical expenses. There may also be eligibility for Federal Social Security Disability benefits. The party responsible for the accident can be sued in order to recover paid costs which exceed the policy limit.

There are a number of important requirements involved in processing a no-fault claim and they are strictly enforced. It is important to follow all deadlines.

The Application for No-Fault benefits must be filed within thirty days from the date of a car accident in New York State, with few exceptions. In most cases, there are no exceptions — so do not put this off. Filing the application does not obligate a person to commence a claim, but it will help to protect his or her rights.

No-Fault claims should be filed with the insurance company which covers the car in which injured individual was an occupant (either as passenger or driver). Pedestrians should file a claim with the insurance company of the car that hit them. If the striking vehicle is not known or was uninsured, a person may file a claim with the insurer of a household family relative who had an auto policy at the time of the accident. If there was no auto policy in the household, file a claim with the Motor Vehicle Accident Indemnification Corporation (MVAIC).

For the New York No-Fault Law to apply, the vehicle involved in the accident must be registered in New York State. The vehicle must either have an insurance policy sold in New York or a policy issued by a company licensed to do business in the State of New York.

Keep in mind, New York No-Fault Law does not cover everyone. It does cover any bicyclist, pedestrian, passenger, or driver injured by a motor vehicle in New York. The vehicle must be a car, truck, bus, taxi or other vehicle covered by New York No-Fault law. In most cases, drivers and passengers are covered if they are in a rental vehicle. No-Fault coverage should be available through the rented vehicle, and victims will still have the ability to use any “extra” coverage that was paid for on their auto insurance policy.

New York State residents who own a car covered by insurance are most likely covered by No-Fault for accidents occurring in the continental U.S. and Canada, as well.

New York’s No-Fault insurance does not cover riders or passengers of motorcycles, Vespas or scooters. It also does not cover anyone injured as a result of driving a motor vehicle while intoxicated. In most cases, people who are not New York residents are not eligible for coverage.

If the injured party was hit by a vehicle that is from out of state or by a vehicle that is uninsured, as long as someone in the injured party’s New York State household has at least one car that is covered through an insurance premium purchased in NY, the injured party will be covered.

Under the No-Fault law, lost earnings and out of pocket expenses can be claimed. Lost earnings require the employer of the car accident victim to send proof of normal wages and written documentation as to the actual loss of income that resulted because of the accident on a form provided by the insurance company called a No-Fault Wage Verification Report. Under No-Fault a worker is entitled to receive 80% of crash-related lost earnings up to $2000 a month unless a special rider on the policy to extend to a higher monthly lost wage was elected. This will stay in effect for a maximum of three years. A note is also required from a doctor that confirms that a disability prevents a worker from performing normal job duties. The doctor must specify the length of the disability and that it is related to the crash.

Note that it is a worker’s responsibility to make sure that an employer has filed the necessary paperwork. Ask for copies and be sure to follow up with the insurance company to make sure that they received what they needed.

Out-of-pocket crash-related expenses that can be claimed include travel expenses to and from doctors or medical treatment, diagnostic tests, prescription drugs, and more.

No-Fault in New York does not include compensation for pain and suffering. Any additional claims need to be pursued by a separate lawsuit against the driver(s) and vehicle owner, or any other party who is responsible for causing the damages. Unless medical bills reach a certain level, or injuries are serious it may not be possible to make a claim for personal injury damages against the negligent driver. You may sue another driver if he or she caused the accident that injured you and you sustain a “serious injury”. Section 5102(d) of the New York Insurance Law describes various conditions that meet the definition of “serious injury”. It is advisable to consult with a personal injury lawyer.

If a claim is denied, the No-Fault carrier’s denial includes instructions on how to fight or arbitrate the denial. Make sure the lawsuit is resolved before arbitrating the no-fault denial. An adverse finding at the arbitration can destroy lawsuit claims for damages.


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