NO-FAULT AUTOMOBILE INSURANCE

In 1974, NYS passed Article 51 of the New York State Insurance Law, formally titled “Motor Vehicle Reparations Act”, and commonly known as “no-fault.”

Under this law, anyone registering a motor vehicle in New York State is required to have at least the minimal amount of automobile insurance coverage for that vehicle. If that vehicle is involved in any kind of an auto accident, whether they are the driver or someone else with their permission is, their insurance carrier will be responsible up to $50,000 of the medical expenses and economic losses caused by the accident to the driver and occupants of that vehicle regardless of who is at fault. Thus we get the name no-fault insurance.

Under this statute, lawsuits for automobile accident cases are only allowed when a plaintiff is seriously injured, as defined by the statute. Insurance Law § 5104(a),(b) provides that a plaintiff in a personal injury action arising out of negligence in the use or operation of a motor vehicle must establish that he/she has incurred a basic economic loss exceeding $50,000 or must establish that he/she has suffered “serious injury”.

Insurance Law § 5102(d) defines serious injury as personal injury which results in one of the following:

• Death

• Dismemberment

• Significant disfigurement

• Fracture

• Loss of a fetus

• Permanent loss of use of a body organ, member, function, or system

• Permanent consequential limitation of a body organ or member

• Significant limitation of use of a body function or system

• Medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person’s usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury or impairment.

The minimal amount of liability coverage you can purchase in NYS is:

• $10,000 for property damage for a single accident
• $25,000 for bodily injury and $50,000 for death for a person involved in an accident
• $50,000 for bodily injury and $100,000 for death for two or more people in an accident

There are three objectives of this law:

(1) Reduce automobile accident litigation to only the most serious injured plaintiffs.

(2) Provide automobile accident victims with more prompt compensation for their economic losses caused by the accident.

(3) Lower the cost of automobile insurance, since there would be less litigation.