What is the law if you are injured in a vehicle accident?

In New York there is a distinction between a vehicle accident and all other types of torts. The New York legislature enacted the Comprehensive Motor Vehicle Insurance Reparations Act (N.Y. CLS Ins. Law § 5101-5109) and the regulations pursuant to 11 N.Y.C.R.R. § 65, et seq., collectively creating the “No-Fault Insurance Law”. Under N.Y. CLS Ins. Law § 5101 automobile insurers are required to provide “first party benefits” or “No-Fault Benefits” up to $50,000.00 per insured for necessary expenses incurred for healthcare goods and services, as well as compensation for time missed from work (up to $2,000 a month). Under 11 N.Y.C.R.R. § 65 No-Fault Benefits can increase to $75,000 if the self-insurer elects to provide additional optional basic economic loss coverage. The No-Fault system provides for a person injured in an automobile accident to receive payment from the other driver’s insurance and/or his own insurance to cover medical expenses as well as lost wages up to $2,000 a month without proving fault of a third party.

The No-Fault Insurance Laws were enacted with the intent to draw line between motor vehicle accidents and all other types of torts, thus removing vehicle accidents from common-law tort litigation. Walton v Lumbermens Mut. Cas. Co., 88 N.Y.2d 211, 644 N.Y.S.2d 133 (N.Y. Ct. App. 1996). The No-Fault Law provides first party compensation for basic economic loss resulting from injuries that occur while using or operating an insured motor vehicle regardless of fault. Michigan Millers Mut. Ins. Co. v Cullington, 59 A.D.2d 784, 398 N.Y.S.2d 740 (2d Dep’t 1977). However, the No-Fault Law bars recovery in automobile accident cases for anything other than basic economic loss unless the plaintiff has a “serious injury” as defined in statute NY CLS Ins § 5102(d). *(See blog on serious injury for a more in-depth analysis of serious injury).

Why does New York use the No-Fault System?

New York’s No-Fault Insurance System is designed “to ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists”. Med. Soc’y v. Serio, 100 N.Y.2d 854, 768 N.Y.S.2d 423 (N.Y. Ct. App. 2003). The No-Fault Law helps to keep minor personal injury cases out of court by requiring the need for a serious injury to get past the No-Fault threshold. Licari v. Elliott, 57 N.Y.2d 230, 236, 455 N.Y.S.2d 570 (N.Y. Ct. App. 1982). The Second Circuit further explained the purpose of the No-Fault Law, stating that a “major objective of New York’s No-Fault Insurance Law is to eliminate most auto accident tort suits in order to reduce the burden on courts.” Rosa v. Allstate Ins. Co., 981 F.2d 669 (2d Cir. 1992).

In furtherance of the goal of ensuring prompt compensation for losses incurred by victims involved in a vehicle accident, regulations have been put in place for the No-Fault Law to include limited time frames for insurance claim procedures. Under the regulations the insured can assign their No-Fault Benefits to a health care service provider. Those providers can then submit claims directly to the insurance company and receive payment for medically necessary services. 11 N.Y.C.R.R. § 65-3.11(a).

Time frames for victims and insurers

The regulations put in place require a victim involved in a vehicle accident to submit a notice of claim to the insurer no later than 30 days after an accident. 11 NYCRR 65-1.1, 65-2.4 (b). Next, the injured party or the assignee, such as a hospital, must submit proof of claim for medical treatment no later than 45 days after services are rendered. 11 NYCRR 65-1.1, 65-2.4 (c). Upon receipt of proof of the verified claim an insurer has 15 business days within which to request “any additional verification required by the insurer to establish proof of claim”. 11 NYCRR 65-3.5 (b). An insurer may also request “the original assignment or authorization to pay benefits form to establish proof of claim” within this time frame. 11 NYCRR 65-3.11 (c). An insurance company then must pay or deny the claim within 30 calendar days after receipt of the proof of claim, unless additional verification has been requested, in which case the 30-day window is put on hold until the relevant information is received. Insurance Law § 5106 (a); 11 NYCRR 65-3.8 (c); 11 NYCRR 65-3.8 (a)(1). An insurer’s failure to pay or deny a claim within 30 days carries considerable penalties. By statute, overdue payments earn monthly interest at a rate of two percent and entitle a claimant to reasonable attorneys’ fees incurred in securing payment of a valid claim. Insurance Law § 5106 (a). Also, a carrier that fails to deny a claim within the 30-day period is generally precluded from asserting a defense against payment of the claim. Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 N.Y.2d 274, 660 N.Y.S.2d 536 (N.Y. Ct. App. 1997).

Fraud Prevention

There have been several incidences of fraud involved with the No-Fault Insurance Law. Because of this a healthcare service provider is not eligible to collect No-Fault Benefits if it fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York. N.Y.C.R.R. § 65-3.16(a)(12); State Farm Mut. Auto. Ins. Co. v. Mallela, 4 N.Y.3d 313, 794 N.Y.S.2d 700 (N.Y. Ct. App. 2005). To be eligible for benefits, a medical services corporation (1) must be owned by a physician who engages in the practice of medicine through that corporation, (2) may not bill for services provided by physicians who are not employees of the corporation, such as independent contractors, and (3) may not pay kickbacks to third parties for the referral of insureds. 11 N.Y.C.R.R. §65-3.11(a); 8 N.Y.C.R.R. § 29.1(b)(4); see also Gov’t Employees Ins. Co. v. Badia, U.S. Dist. LEXIS 33667 (E.D.N.Y. 2015).

Important definitions

The two most important definitions to know in No-Fault Insurance Law are “first party benefits” and “basic economic loss”. “First party benefits” means payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle. NY CLS Ins § 5102. Basic economic loss” in short, means up to fifty thousand dollars per person for medical and psychological needs, as well as loss of earnings from work that a person would have performed (up to $2,000 a month). Non-economic loss on the other hand refers to pain and suffering and similar non-monetary detriment. NY CLS Ins § 5102 goes into much more detail about what is covered by basic economic loss listed below:

(1) All necessary expenses incurred for: (i) medical, hospital (including services rendered in compliance with article forty-one of the public health law, whether or not such services are rendered directly by a hospital), surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical therapy (provided that treatment is rendered pursuant to a referral) and occupational therapy and rehabilitation; (iii) any non-medical remedial care and treatment rendered in accordance with a religious method of healing recognized by the laws of this state; and (iv) any other professional health services; all without limitation as to time, provided that within one year after the date of the accident causing the injury it is ascertainable that further expenses may be incurred as a result of the injury. For the purpose of determining basic economic loss, the expenses incurred under this paragraph shall be in accordance with the limitations of section five thousand one hundred eight of this article.

(2) Loss of earnings from work which the person would have performed had he not been injured, and reasonable and necessary expenses incurred by such person in obtaining services in lieu of those that he would have performed for income, up to two thousand dollars per month for not more than three years from the date of the accident causing the injury. An employee who is entitled to receive monetary payments, pursuant to statute or contract with the employer, or who receives voluntary monetary benefits paid for by the employer, by reason of the employee’s inability to work because of personal injury arising out of the use or operation of a motor vehicle, is not entitled to receive first party benefits for “loss of earnings from work” to the extent that such monetary payments or benefits from the employer do not result in the employee suffering a reduction in income or a reduction in the employee’s level of future benefits arising from a subsequent illness or injury.

(3) All other reasonable and necessary expenses incurred, up to twenty-five dollars per day for not more than one year from the date of the accident causing the injury.

Who is entitled to first party benefits?

Under NY CLS Ins § 5103 every owner’s policy of liability insurance insures first party benefits to pedestrians, occupants of the vehicle you are driving, the person who holds the insurance policy and his family, and any individual who is legally driving the insured vehicle. Also, if you are driving your vehicle outside of New York in any other state or in any Canadian province, your insurance policy covers you for at least the minimum amount required by the laws of that state or province. Under NY CLS Ins § 5221 a qualified person who has complied with all the applicable requirements, such as submitting a notice of claim to the insurer within 30 days after an accident, shall be deemed to be a covered person.

First party benefits are not entitled to motorcyclists or their passengers, a person who intentionally causes his own injury, a person who is injured as a result of operating a motor vehicle while in an intoxicated, or a person who is injured while committing a felony or fleeing from the police.

What do you do if you’ve been in a car accident?

If you are in a car accident there are several steps to take to insure your safety and protect your legal rights.

  • Stop immediately at the accident scene, then put on your hazards and move to the nearest safe area if possible, to keep your vehicle from blocking traffic.
  • Exchange insurance information with the other driver.
  • Call 911 if you or someone else is injured. If it is a minor accident still call the local police to report it. You may need the police report in order to file a claim with your insurance company.
  • Get medical care if you have been injured.
  • Gather as much information as possible: take photographs of the scene, damage to the vehicle, and any visible injuries to yourself. Also, obtain contact information from any eyewitnesses who saw the accident.
  • After the accident report the accident and file your insurance claim as soon as possible within 30 days of the accident. Make sure to get your claim number and the claim adjusters name for your records. Also, keep receipts for all expenses sustained due to the accident.
  • Finally, consult an attorney to make sure you are fully compensated for damage to your vehicle and any injuries you may have sustained.