Is New York a No-Fault State?
Last Updated on December 26, 2022
Under New York’s no-fault insurance system, drivers must carry personal injury protection (PIP) and make certain claims through their own insurance company, regardless of fault.
Keep reading to find out everything you need to know about New York’s no-fault insurance system and how it works.
Table of Contents:
- New York Car Insurance Requirements
- How New York’s No-Fault Insurance Works
- What Does No-Fault Insurance Cover?
- New York No-Fault Insurance Exclusions
- Minimum Liability Insurance Limits in New York State
- Pros and Cons of New York’s No-Fault Insurance System
- New York’s No-Fault Insurance System Limits Your Ability to Sue
New York Car Insurance Requirements
New York, like most states, requires drivers to carry a certain minimum amount of car insurance to drive on public roads legally. Any car insurance policy you purchase in New York will meet or exceed these minimum insurance requirements.
Per New York DFS requirements, drivers must carry the car insurance coverage:
No-Fault (Personal Injury Protection) Insurance: Drivers in New York must carry no-fault insurance, also known as personal injury protection (PIP) insurance. No-fault coverage pays for medical expenses, lost wages, and other reasonable costs associated with a car accident, regardless of who was at fault. It may cover you as a driver, passenger, or pedestrian injured in a vehicle accident.
Liability Insurance: New York, like most states, also requires drivers to carry a certain minimum amount of liability insurance. Liability insurance compensates other people for property damage you inflicted with your vehicle. If you crash into someone’s vehicle, for example, then your property damage liability insurance will cover the cost of repairing or replacing the vehicle. Like other no-fault states, New York’s liability insurance is built for property damage – like damage to a vehicle – and not bodily injury liability expenses.
Uninsured Motorist Coverage: Uninsured motorist coverage protects you after an accident with an uninsured or unknown motorist – like a hit and run or an accident with an uninsured vehicle.
How New York’s No-Fault Insurance Works
New York’s No-Fault law requires drivers to carry no-fault insurance, also known as personal injury protection (PIP) coverage.
Here’s how New York’s no-fault / PIP insurance coverage works:
- No fault / personal injury protection (PIP) insurance is designed to pay for economic losses from an accident promptly, regardless of fault
- After a car accident, you make a claim through your own insurance company for certain damages related to the accident
- New York’s no-fault insurance covers economic losses (including medical and health expenses, lost earnings, and other reasonable and necessary expenses related to injuries sustained in a car accident)
- The driver and all passengers injured in your vehicle receive up to $50,000 per person under New York’s basic no-fault insurance coverage
- New York’s no-fault insurance does not cover damage to your vehicle or damage to anyone else’s vehicle; property damage continues to fall under a fault-based insurance system, and the at-fault driver covers the cost of repairing or replacing the damaged property
- No-fault insurance in New York is primary to health insurance, which means your no-fault insurance pays first after an auto accident
The goal of New York’s no-fault insurance system is to help drivers and passengers recover from an accident as quickly as possible. Instead of fighting for compensation from the at-fault driver’s insurance company, for example, you can receive immediate compensation from your own insurance company, allowing you to receive medical care and cover immediate medical expenses.
What Does No-Fault Insurance Cover?
New York’s no-fault insurance covers you and all relatives who reside in your household against certain economic losses caused by injuries sustained in motor vehicle accidents.
This insurance extends to cover you in New York and anywhere else in the United States, along with all US territories and possessions. It also extends to Canada.
New York’s basic no-fault auto insurance coverage can cover all of the following:
Reasonable and Necessary Accident-Related Medical & Rehab Expenses: The main goal of New York’s no-fault insurance is to cover up to $50,000 of reasonable and necessary accident-related medical and rehabilitation expenses per person. This coverage extends to the driver and certain passengers. This coverage is primary to health insurance, which means it pays before your health insurance pays.
Up to 80% of Lost Wages: If you are injured in a car accident and unable to work, then your no-fault insurance covers up to 80% of your lost earnings, up to a maximum of $2,000 per month for up to three years from the date of the accident.
Up to $25 Per Day for Other Reasonable and Necessary Expenses: No-fault insurance may also cover other reasonable and necessary expenses you must pay after your accident. If you need to hire outside help, for example, or pay for transportation to and from your physical therapy appointments, you can claim up to $25 per day for up to one year from the date of your accident.
Up to $2,000 in Death Benefits: No-fault insurance includes a $2,000 death benefit beyond the $50,000 limit above. This benefit is payable to the estate of any eligible person killed in a motor vehicle accident.
New York No-Fault Insurance Exclusions
Driving while intoxicated or intentionally injuring yourself may make you ineligible to receive benefits through New York’s no-fault insurance system.
Some of the exclusions that could deny or limit your no-fault insurance benefits are:
Driving While Intoxicated: Driving while intoxicated or impaired by a drug could make you ineligible for certain no-fault insurance benefits, assuming the impairment contributed to the accident. Your insurer must still cover certain immediate emergency expenses, although the insurer may recover certain benefits from the driver after a DUI/DWI conviction.
Intentional Injuries: If you intentionally injure yourself, then your insurer is not required to cover your injuries through your no-fault insurance.
Riding an ATV or Motorcycle: ATV and motorcycle riders and passengers may not receive coverage under New York’s no-fault insurance system. However, if you are a pedestrian who was struck by a motorcycle or ATV, then you will be covered.
Injured While Committing a Felony: If you are injured while committing a felony, you may not receive compensation under New York’s no-fault insurance system.
Driving While Uninsured: Owners of uninsured vehicles are not eligible for compensation under New York’s no-fault insurance system.
Driving a Stolen Vehicle: If you are involved in an accident while driving a vehicle you know to be stolen, then you cannot receive compensation through no-fault insurance.
Minimum Liability Insurance Limits in New York State
All insurance policies in New York come with $50,000 of no-fault coverage (personal injury protection or PIP) at the most basic level. Additionally, any insurance policy meets a certain minimum amount of liability coverage as required by New York state.
New York requires the following minimum amounts of third-party liability coverage:
- $25,000 of bodily injury liability coverage per person
- $50,000 of bodily injury liability coverage per accident
- $10,000 of property damage liability coverage
- $25,000/$50,000 of uninsured motorist bodily injury liability coverage per person/per accident
Insurers may express this policy as a 25/50/10 policy.
Some drivers meet these minimum liability requirements and buy a minimum liability policy to save money, while others exceed these requirements for added protection.
Pros and Cons of New York’s No-Fault Insurance System
Overall, New York’s no-fault insurance system has supporters and detractors. Personal injury lawyers dislike the system because it reduces the number of lawsuits, for example, while drivers with injuries enjoy faster payouts.
Some pros and cons of New York’s no-fault insurance system include the following:
- Faster payouts. In at-fault states, insurers and police need to investigate the accident to determine fault before drivers receive compensation. You may be unable to pay your medical bills for months while waiting for compensation from the other driver’s insurer. In New York, drivers enjoy faster payouts from their insurer immediately after the accident.
- Coverage for medical bills and rehabilitation expenses. At-fault states do not require drivers to carry personal injury protection (PIP) coverage, also known as no-fault insurance. That means some drivers receive no compensation for medical bills and rehabilitation expenses after an accident. In comparison, New York drivers have peace of mind they’re covered for medical expenses.
- Limited ability to sue. Personal injury lawyers dislike New York’s no-fault system because it limits the number of lawsuits, and it limits the amount of non-economic damage you can claim after an accident. One goal of the no-fault insurance system is to limit the number of frivolous lawsuits.
- Higher premiums. New York, along with other no-fault states, has some of the highest insurance premiums in the country. States with no-fault insurance tend to have higher insurance premiums.
- Does not apply to property damage. No-fault rules don’t apply to property damage. If someone else destroys your vehicle in an accident where they were at fault, the other driver must cover the cost of repairing or replacing your vehicle.
New York’s No-Fault Insurance System Limits Your Ability to Sue
Like other no-fault states, New York limits your ability to sue other drivers after an accident. You can only file a lawsuit against another driver in cases involving serious injuries.
In comparison, at-fault states allow drivers to file lawsuits against others for pain and suffering and other non-economic expenses after an accident, regardless of the severity of injuries.
To file a lawsuit against another driver in New York, you must reach the no-fault threshold. That “threshold” refers to the severity of your injury. New York has several serious injury categories. Depending on the accident and severity of your injuries, you may or may not be able to sue the other driver.
Generally, suppose you have a permanent disability or serious injury after a car accident. In that case, you can file a lawsuit in New York for pain and suffering and related damages.
Fractures are automatically considered a serious injury in New York, for example, as is significant scarring. Loss of a fetus is also considered a serious injury.
Talk to a personal injury lawyer in New York to determine if your car accident injuries meet the threshold to file a lawsuit under New York’s no-fault system.
Final Word – New York’s No-Fault Laws
New York uses a no-fault insurance system to simplify insurance payouts after accidents.
Under New York’s no-fault insurance system, drivers make a claim through their own insurance company regardless of fault, and your insurer covers medical bills, lost wages, and certain other expenses.
Compare car insurance quotes in New York today to find the best no-fault insurance for your unique needs.