Different states adopt different systems concerning auto insurance. New York has adopted a “no-fault” system.
Simply put, under a no-fault system, individuals turn to their own insurance companies to pay the costs of minor injuries, regardless of who was to blame for any particular accident.
The basics of no-fault insurance
The primary goal of no-fault insurance, also known as Personal Injury Protection (PIP), is to reduce the number of lawsuits filed over auto accidents, thereby minimizing costs and ensuring prompt payment for injuries. Under this system, your own insurance coverage compensates you for economic losses such as medical expenses and lost wages, regardless of who causes an accident.
It’s crucial to understand that no-fault insurance doesn’t cover property damage or severe injuries. It also doesn’t absolve a driver who’s found to be responsible for an accident from liability for significant personal injury and property damage claims.
Limits and exceptions to no-fault insurance in New York
In New York, basic no-fault insurance covers up to $50,000 per person for basic economic loss, including medical costs, lost earnings up to $2,000 per month for three years from the date of the accident, and up to $25 a day for a year from the date of the accident for other reasonable and necessary expenses.
The no-fault system has certain exceptions. If the injuries sustained in the accident are deemed “serious” as per the New York Insurance Law definition, the injured party can step outside the no-fault system and pursue a claim against the at-fault driver.
The importance of understanding no-fault insurance
Understanding how no-fault insurance works in New York State can significantly influence how you handle an auto accident from a financial perspective. It’s also vital to carry the appropriate coverage. If something happens and you end up with a catastrophic injury, you’ll have limited time to seek compensation from a negligent party, so don’t waste time. Seeking legal guidance regarding these matters may be beneficial so you can learn more about your options and get things moving with your claim.