Automobile Insurance Coverage

Automobile insurance laws in New York require the owner of a vehicle to have three types of insurance coverage. N.Y. Veh. & Traf. Law § 341 (Consol. 2002). These types of insurance are no-fault coverage, liability insurance, and uninsured motorist protection. No-fault insurance insures payment for medical expenses and lost wages for a driver or passenger injured in, or a pedestrian injured by, the owner’s car, regardless of who was responsible for the accident. Liability insurance provides compensation to another person in the event that you cause an accident and are found to be liable to the person for damages. The minimum amount of liability coverage required by law is $25,000.00 (N.Y. Veh. & Traf. Law § 341 (Consol. 2002)), but you can purchase higher amounts of liability insurance in order to protect your personal assets against the risk of higher damages being awarded against you in the event you cause another serious injuries. Personal injury protection is just one type of insurance New York requires drivers to have. New York law also requires you to have insurance that covers medical, surgical, funeral, and disability benefits regardless of fault. This is known as no-fault insurance. N.Y. Ins. Law § 5103.

In most states, auto insurance functions under a traditional fault-based system. Insurance companies make payments based on each person’s degree of fault in a particular motor vehicle accident. However, long and costly court battles are often required to determine who is at fault in many accidents. In an attempt to reduce this problem, some thirteen states (i.e. Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah, and Colorado) have adopted no-fault insurance laws – also called “personal injury protection” or “PIP.” Under New York’s no-fault insurance statute, if you are hurt in an accident, your insurance automatically will pay up to $50,000.00 in actual economic losses regardless of who caused the accident. N.Y. Veh. & Traf. Law § 341 (Consol. 2002).

Under New York’s no-fault law, lawsuits involving auto accidents can be brought only when a serious injury is sustained and monetary damages exceed the no-fault benefits. N.Y. Veh. & Traf. Law §341. Lawsuits can also be brought if a serious injury is sustained and non-economic damages (such as pain and suffering) exceed the no-fault benefits. N.Y. Veh. & Traf. Law §341. A “serious injury” is defined as a personal injury which results in death, dismemberment, significant disfigurement, a fracture, permanent loss of use of a body organ, permanent consequential limitation of use of a body function, or a non-permanent injury that prevents the injured person from performing substantially all of the person’s daily activities for not less than ninety days during the 180 days immediately following the occurrence of the injury or impairment. N.Y. Ins. Law § 5102.

A person will not be able to recover compensation from no-fault benefits for the following reasons:

  • Driving while intoxicated or impaired by use of a drug that contributes to the accident;
  • Intentionally causing his or her own injuries;
  • Riding a motorcycle;
  • Injured while committing a felony;
  • Injured while occupying a vehicle known to be stolen;
  • Injured while racing or speed testing a motor vehicle; and
  • An owner of a uninsured vehicle. N.Y. Ins. Law § 5103(b)(3).

In order to recover under a no-fault insurance policy, written notice of the details of the accident is expected to be given to the insurer by or on behalf of the eligible injured person as soon as possible, but no more than 30 days after the date of the accident. The time limit to submit a medical claim to the insurer for no-fault benefits should be no later than 45 days from the date of service or no later than 45 days after written notice was given to the insurer, whichever is later.

Liability Insurance

Liability insurance is required by New York law. N.Y. Veh. & Traf. Law § 341 (Consol. 2002). The liability portion of an insurance policy is specifically intended for defending and settling any claims or paying any judgments rendered against the insured in an automobile negligence claim. If you are injured by the negligence of a defendant, we will make a claim under the bodily injury liability coverage of the negligent defendant’s insurance policy. Liability coverage is not health insurance, and it is not designed to pay for your medical bills as they are incurred. It is designed for a one-time settlement or payment for all of your damages. Liability insurance minimums required by law in New York are:

  • $25,000 for bodily injury (not death) to one person in any one accident
  • $50,000 for injury resulting in the death of one person in one accident
  • $50,000 for injury (not death) of two or more persons in any one accident
  • $10,000 for injury to or harm to property of others in one accident
  • $100,000 for injury resulting in death of two or more persons in one accident. N.Y. Veh. & Traf. Law § 341 (Consol. 2002).

Lawsuits in New York must be filed against the negligent driver and may not also name the insurance carrier as a defendant. In fact, the jury is not allowed to know that there is insurance coverage available on the defendant. If the jury renders a verdict in excess of the defendant’s liability policy limit, the defendant is then personally liable out of his or her own assets for the additional amount.

When McPhillips Fitzgerald & Cullum represent a person who is injured in an accident, one of the first things we do is investigate all possible insurance coverage that is applicable. There are two categories of auto insurance – first party coverage and third party coverage. First party coverage covers you and your property (such as medical expenses, damage to your vehicle and the insurance company’s duty to defend you in the event that you are sued as the result of your operation of a vehicle, etc.). Third party coverage is for your responsibility to pay for injury caused to other people (and vice versa), whether in your vehicle, or another vehicle involved in the accident. The coverage (and its exclusions) is set forth in your insurance policy. In exchange for the payment of a premium, the insurance company promises to provide compensation in the event of certain occurrences. Though a full recitation of insurance coverage and laws would occupy several large text volumes, the following is a brief synopsis of the most typical coverage and issues. Many people mistakenly believe that if they meet the requirements under New York law that they have full coverage. As the descriptions of the various categories of automobile insurance below indicate, the New York requirements constitute a very bare minimum and rarely adequately protect persons involved in automobile accidents. The statutory minimum alone does not constitute full coverage.

Medical Payments (Med-pay) Coverage

Medical payments coverage is a form of health coverage referred to by various terms, including “med-pay,” “personal injury protection (PIP),” or on occasion “economic loss protection benefits.” This coverage is available to the insured driver (the individual who holds the policy which includes med-pay coverage) and any passengers in the insured’s vehicle for injuries sustained in an accident, regardless of the fault of the driver. It is important to note that the insurance policy of the negligent party does not pay med-pay or PIP benefits to an injured plaintiff. These benefits are limited to the driver or passengers in the insured vehicle, regardless of fault. The plaintiff looks to his or her own insurance policy or the policy on the vehicle in which he was a passenger for med-pay or PIP benefits.

The amount of med-pay benefits that may be paid to any individual is determined by reference to the policy limit for this particular type of coverage, as stated in the insurance policy declarations sheet for the person who purchased the coverage.

Uninsured and Underinsured Motorist Benefits

Two other related types of voluntary coverages you can (and should) purchase are uninsured and underinsured motorist benefits. These types of coverage protect you against a negligent individual who illegally does not have liability insurance coverage or has minimum coverage that is inadequate to fully compensate you for your injuries. If you were involved in an accident with an uninsured but negligent individual, we would make a claim for you under your own uninsured motorist coverage. Your own insurance carrier would then have to pay any judgment that may be rendered, up to the limits of the policy which you purchased.

If the person who caused the accident has liability insurance, but the policy limit of his or her liability insurance is less than the uninsured motorist coverage of your policy, we can make an additional claim under your own policy for what is called underinsured motorist benefits, as long as your damages exceed the limits of the other party’s liability coverage. A complicated body of case law has evolved dealing with this type of benefit, and the experience of an attorney familiar with these issues is important in order to obtain the maximum amount of recovery for you.

Collision Coverage

Collision coverage is a type of voluntary coverage you can purchase which provides for the repair or replacement of your own vehicle after an accident, regardless of whether or not you are at fault. This is different than property liability insurance coverage discussed above. An innocent victim of an accident may present a claim for the property damage under his or her own collision coverage or under the negligent individual’s property damage liability insurance coverage. Your own collision coverage normally includes a deductible, whereas property damage liability insurance coverage does not. In an automobile accident case, after a claim has been paid under collision coverage, the insurance carrier who paid the claim may proceed against the property damage liability insurance carrier for the negligent individual to recover the amount paid out. This process is called subrogation, and does not affect your recovery.


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