No Fault Insurance

Front 1

What is the purpose of no-fault insurance?

Back 1

No-Fault insurance is designed to screen "minor" suits out of the litigative process.

The plaintiff in a personal injury case must please past the no fault threshold (i.e., there must have been a serious injury or a loss greater than basic economic loss).

Front 2

Is insurance compulsory in New York?

Back 2

Yes. The insured must purchase insurance with both the required liability coverage and the required no-fault provisions to register his or her car in NY.

**Note-some parties may choose to be self-insured. However, self-insurers must comply with the requirements of no-fault coverage.

Front 3

What types of benefits does the no-fault insurance law provide?

Back 3

The act provides up to $50,000 "first-party benefits (i.e., no-fault benefits paid to teh insured) plus $25,000/$50,000/$10,000 minimum liability coverage if the insured is sued by a third party in a tort action.

Note-the act does not provide coverage for property damage, but auto policies by statute must have a minimum of $5,000 liability coverage for property damage.

Front 4

What does the Motor Vehicle Accident Indemnification Corporation (MVAIC) provide?

Back 4

MVAIC provides no-fault benefits to injured parties who, through no fault of their own, were involved in an accident with motor vehicles that were either uninsured, stolen, unidentified (hit and run), operated without the owner's permission, or unregistered.

An injured party may also recover no-fault benefits through MVAIC if the vehicle in question was registered in a state other than NY, or registered in NY but not covered by a liability policy.

MVAIC also provides no-fault benefits where the vehicle is insured bu tthe insurer denies coverage or disclaims liability.

Front 5

What does the no-fault insurance law cover?

Back 5

It covers the "use or operation" of a vehicle.

**Note-it is questionable whether the Act covers entering or leaving, or loading or unloaded a vehicle.

Front 6

Who is covered under the no-fault insurance law?

Back 6

Covered persons include:

1. Persons injure by the insured owner's vehicle including :
(a) the owner, operator, or occupants of the insured auto.
(b) pedestrians hit by the insured's auto.
(c) any other persons entitled to first-party benefits.

2. persons injured by an uninsured motorist and, outside of the state, by an insured motor vehicle (i.e., the name insured and members of her household).

3. Occupants of a school bus, but only if not covered by another policy providing first-party benefits.

4. Pedestrians injured by a motorist of ATV in NY.

Front 7

Who may be excluded from coverage under the no-fault insurance law?

Back 7

1. Persons occupying another motor vehicle or motorcycle.

2. Any person injured:
(a) by his own intentional act.

(b) while operating a motor vehicle in an intoxicated state

(c) while committing a felony or attempting to avoid a lawful arrest

(d) while operating a motor vehicle in a race or speed test

(e) while operating or occupying a motor vehicle know by him to be stolen

(f) while operating or occupying his own vehicle for which no-fault coverage is not in effect

(g) while a pedestrian being struck by his own vehicle which no-fault coverage is not in effect

(h) while repairing, servicing, or maintaining a motor vehicle and the injury occurs on business premises

Front 8

How far does no-fault insurance coverage extend?

Back 8

No-fault insurance coverage extends to the use or operation of an auto anywhere in NY or in any other state.

With respect to a NY auto driven in another state, coverage must be the minimum required by the laws of the other state (or Canada province).

Front 9

What do "first-party benefits" include?

Back 9

Basic economic losses BUT NOT noneconomic losses (i.e., pain and suffering).

**Also-you cannot recover more than your policy limit!

Front 10

What does basic economic losses include?

Back 10

medical expenses, lost earnings, and non-income producing expenses.

Front 11

What type of medical expenses can you recover under no-fault insurance coverage?

Back 11

The insured party may recover all "necessary" medical expenses, including some forms of non-traditional treatments (e.g., chiropractic treatments).

Front 12

Is there a time limit on recovery of medical expenses?

Back 12

Generally, there is NO time limit on recovery of medical expenses as long as it can be determined within one year after the accident that further expenses may be incurred.

Front 13

How much can one recover in lost earnings?

Back 13

Lost earnings include salaries and wages as well as reasonable and necessary expenses that the injured party may have incurred in lieu of those that she would have performed for income.

Note--there is a $2000/mo for not more than three years from the date of the accident limit on recovery of lost earnings.

Front 14

Are there any limitations on recovering lost earnings?

Back 14

Yes.

Recover of lost earnings is limited to $2000/mo for not more than 3 years from the date of the accident,

**Note-- this does not appear to extend to loss of future earnings by a covered person who is unemployed at the time of the injury.

Front 15

What type of costs are included in non-income-producing expenses?

Back 15

Non-income producing expenses include costs incurred fro such things as household services normally performed by, or needed by, the injured covered person.

Reasonable and necessary expenses are recoverable up to $25/day for not more than one year from the date of the accident.

Front 16

How much is the death benefit under the no-fault insurance law?

Back 16

$2000 for those who meet the requirements.

Basic economic loss does not include any loss incurred on account of death, except that the estate of any covered person, other than an occupant of another motor vehicle or a motorcycle, may receive a death benefit of $2000 for the death of such persons arising out of the use or operation of such motor vehicle.

Front 17

How must first-party benefits and additional first-party benefits be paid?

Back 17

These benefits must be paid as the loss is incurred (periodically).

Front 18

How soon must a claimant's claim be paid?

Back 18

A claim must be paid within 30 days after the claimant presents proof of the fact and amount of loss.

Front 19

How should disputes as to the amount claimed be resolved?

Back 19

If a dispute arises, the claimant can either submit the issue to arbitration or bring a contract action against the insurer to recover unpaid proceeds.

If the arbitrator's award is $5000 or greater, the insurer or claimant can bring a court action de novo.

Front 20

What can a covered person sue another covered person for?

Back 20

Note-- need a SERIOUS INJURY.

1. property damage claims;
2. damages for wrongful death
3. economic loss not included in basic economic loss; and
4. noneconomic loss (pain & suffering) if there is a serious injury.

** Note-- ability to sue is no good unless it is a multiparty episode and the other party can be demonstrated to be negligent.

Front 21

What counts as a serious injury?

Back 21

1. Death
2. Dismemberment-this is a distasteful term for losing a limb
3. Significant dismemberment
4. Fracture--broken bone
5. Loss of a fetus
6. Permanent loss of a bodily organ--kidney, liver, spleen
7. Permanent consequential limitation on the use on either a limb or an organ.
8. Injury or impairment of a non-permanent nature which prevents you from performing all of your usual or customary activities for a period of 90 days

Front 22

What can a covered person sue a non-covered person for?

Back 22

A covered person my sue a non-covered person for all damages, including basic economic loss and pain and suffering (even in the absence of serious injury)

Front 23

For a covered person to settle with a noncovered person, what requirements must be satisfied?

Back 23

A covered person may not settle with a noncovered person unless:

(1) the covered person has written consent to do so from his insurer;
(2) the settlement is approved by the court: OR
(3) the amount of the settlement exceeds $50,000.

Front 24

Explain the concept of subrogation with respect to the no-fault insurance law.

Back 24

An insurer is subrogated to any cause of action not commenced by its insured against a noncovered person within two years, to the extent of first-party benefits paid or payable to the insured.

An insurer who pays first-party benefits MAY NOT seek reimbursement by subrogation from the tortfeasor except where the statute allows:

1. against a noncovered person,
2. for serious economic loss, or
3. where a no-fault insurer seeks recovery against the tortfeasor's insurer.

Front 25

Can a remainder follow a fee simple?

Back 25

No, never! Because a remainder cannot "cut short" a preceding estate, it can NEVER follow a fee simple, which is of potentially infinite duration. Executory interests are the future interests that cut short preceding estates or follow a gap after them.

Front 26

How can one insurer recover from another insurer?

Back 26

Settlement between insurers is by arbitration, not by tort actions.

Front 27

What is the interplay between workers' compensation and no-fault insurance.

Back 27

A workers' compensation carrier does not have a lien on the proceeds of a recovery in an action arising out of an auto accident and may not institute an action for such a recovery as assignee of the insured. A workers' compensation carrier may recover benefits paid to a claimant from the auto insurance carrier fo a negligent third party under intercompany loss transfer provisions provided that at least one of the vehicles involved in the accident weighed more than 6500 pounds or was a motor vehicle used principally for transportation of person for hire.