The “New York Comprehensive Car Insurance Act,” which most people call the “no fault law,” was enacted in 1973 and came into effect the following year. The purpose of the law is to limit the number of personal injury claims for car accidents, as many politicians have this agenda on their platforms.
The no-fault law is groundbreaking in that it provides for immediate payment for medical treatment, lost income and other reasonable expenses incurred as a result of injuries resulting from motor vehicle accidents. The law stipulates that this fee must be paid up to $50,000 per person. These payments are known as “first-party benefits” or “basic economic losses”. The reason why it is called error-free, is because these payments are made regardless of the error. If you lose control of your car and crash into a tree, you still get this payment.
If your medical bills, lost income and/or out-of-pocket expenses amount to more than $50,000, you may still sue the party who caused your injury for this additional amount (also for pain and suffering.) If your injury is “serious” and caused by negligence of others, you can still take action. No-fault does not cover property damage, so you will still need to sue for damage to your car unless you carry “collision” or “full coverage” for your vehicle.
WHO WAS WAITING FOR?
“The No Fault Benefit is provided for economic losses arising from the use or operation of a motor vehicle (Insurance Act Section 5103). Section 5102 defines a motor vehicle as “all vehicles driven on public highways accept a motorcycle.” One might imagine that a motorcycle intentionally excluded due to frequent accidents, which would make motorcycle insurance too expensive.
You are covered by fault-free insurance and are thus what the law calls a “protected person”, if you are a policyholder, driver or passenger in a vehicle or pedestrian who is injured by the operation of the vehicle. If you are not a policyholder and the auto insurance is void, you will be covered for a no-fault “first-party” benefit under any auto insurance policy in your household. For example, if your adult child in your house has a car, it will protect you. If there is no “household car”, there is a state fund called the “Motor Vehicle Accident Compensation Company” (MVAIC) that will provide “no fault” benefits.
There are some exceptions that you should be aware of. First, there must have been an accident. No-fault benefits will not be paid if the injury is caused by a willful act. Most insurance policies deny intentional, faultless action and other types of claims. For example, you wouldn’t expect your homeowner’s insurance to pay for damage caused because you didn’t like your carpet anymore so you poured ink on it. Similarly, if someone accidentally crashes into your car, the insurance will not cover the loss. Fortunately, things like this don’t happen often!
You are also not covered if you are in your “work path”. This applies, for example, if you are driving a taxi, you work as a flight attendant in an ambulance or you are making a sales call. In most cases, workers’ compensation will pay somewhat similar benefits that will be discussed in another article.
If you are the driver, and you are driving under the influence, the no-fault benefit will not be paid to you, but will be paid for the passengers or pedestrians you injure. Not surprisingly, if you are injured while committing a crime or while trying to evade law enforcement authorities, no benefits will be paid. Coverage will also not be provided if you operate a vehicle that is found to be stolen.
So, the upside to “no-fault”, is that you are automatically entitled to payment of medical expenses and many other things if you are involved in a car accident, except for the exceptions discussed above. The downside is that in order to have a “negligence” claim for negligence against the operator that caused your injury, you must have what is defined by law as “serious injury”. I will explain this in more detail later in this article.
WHAT DO YOU GET IF YOU GET IT?
Insurance Law Section 5102 defines it as $50,000 per person for:
All necessary expenses incurred for medical and related services, therapy, certain non-medical treatment by accepted religious methods, and other professional health services during the occurrence can be ascertained within one year after the injury;
Loss of reasonable and necessary income and expenses incurred in obtaining services in lieu of such persons who will generate income, up to $2,000 per month for up to three years;
All other reasonable and necessary expenses incurred up to $25 per day for no more than one year after the accident.
The first paragraph outlines the types of medical care covered. Non-medical treatments may include acupuncture and some other holistic therapies, but I wouldn’t risk pushing “religious” treatments that aren’t widely recognized. Benefits are paid according to a “fee schedule,” and treating medical professionals cannot charge higher fees, making it difficult to find a doctor who is willing to accept payment without error. Most chiropractors and physical therapists are happy to accept it, but specialists such as orthopedic doctors, neurologists, and plastic surgeons can be difficult to find.
The second paragraph allows payment for lost income that can be proven due to an accident. If you are self-employed, you can submit a tax return to show lost income. You usually need to provide three years of tax returns – the previous two years show what you normally earn and the year the accident occurred shows you made less. If you need to hire someone to temporarily replace you, such as someone to drive your taxi when you have a medal, the amount you paid for the replacement driver can be reimbursed. Obviously, if you work “off the books”, you can’t claim for lost income benefits.
The third paragraph offers a small amount of money that would normally be used to reimburse taxis for medical treatment and similar expenses. You can also get reimbursed for household help if you can’t care for your kids or take care of your home (but only $25 a day.) There is the option of buying an additional $25,000 once the $50,000 is up, but very few people choose to purchase this additional coverage. Your no-fault insurance benefits will, in certain circumstances, even cover you for accidents occurring in other states.
TIMETABLE
An application without error must be submitted to the insurance company within thirty days of the accident. All claims must be filed within 180 days of their service date. Most insurance companies will pay the benefits immediately. Problems can arise with regard to the adequacy of the evidence provided, which may delay payment. Insurance companies will sometimes claim that treatment is not medically necessary and refuse payment, in which case the doctor may mediate this refusal or sue the insurance company for payment of their bill. We recommend that you consult a medical professional who is willing to undertake this arbitration, rather than having to be responsible for the payment, or with a lien in your case, if the insurance company refuses to pay. Insurance companies also have the right to ask you to see their hired doctor to determine if your treatment is necessary. Eventually, when your injury improves, the insurance company’s hired doctor will “reject” your medical treatment because it is no longer needed, which can also be arbitrated or sued by the medical professional treating you.
HOW DOES NEW YORK LAW DEFINE “SERIOUS INJURY?”
The threshold for “serious injury” is defined in 5102(d). Compensation for pain and suffering can only be recovered if the plaintiff suffers injuries resulting in:
Dead; or
Cutting; or
Broken; or
Significant defects; or
Fetal loss; or
Permanent loss of use of an organ, member, function or system of the body; or
Permanent consequential restriction of use of body functions or systems; or
Significant restrictions on the use of body functions or systems; or
Medically determined injury or impairment of a non-permanent nature, which prevents the injured person from performing substantially all material, acts which constitute the person’s usual or habitual activities for not less than 90 days for 180 days immediately following the occurrence or injury.
The first two categories above are self-explanatory. Fractures show up on x-ray and will always meet the threshold of serious injury, no matter how small they are. A hairline fracture on the left little finger is sufficient, even if no treatment is required and there is no disability. Significant defects are less clear. Usually the problem is cuts and abrasions on the face or other visible parts of the body that result in “scars” and whether or not the scars that remain are actually staining. Case law dictates that scars must be so unattractive that the person becomes the target of “pity and ridicule”. The mark that must be “shown” will not meet the threshold.
With the loss of the fetus, it must be proved that the miscarriage was really caused by an accident. It is unbelievable to claim that a miscarriage was caused by minor repercussions, especially if the woman did not seek immediate medical care for any injuries and lost the baby a month later.
The “permanent loss” and “significant limitation” sections are meant to cover paralysis or other heavy use losses, but have evolved to cover much less severe disorders such as ligament tears and herniation of the neck and back. There must always be objective evidence, such as MRI and physician reports to support these claims, subjective claims of pain are never sufficient to meet the serious injury threshold.
The threshold is met when the injured person loses more than 90 days of work due to their injury. Time out of work does not have to be immediate and does not have to be consecutive. For example, a person could be out of work for a month after an accident, try to return to work, quit again, come back, have surgery and then come out again to recover. For a total of more than 90 days out of the first 180 days, it meets the serious injury threshold as long as the doctor certifies that you are indeed unable to work. Not impossible, but much more difficult to qualify under this branch without a full time paying job, but there are some circumstances where it may apply. For example, a housewife with young children may not be able to babysit and need to hire child care for her children, losing 90 of her usual 180 activities.