What is the New York State “No-Fault” law?
Insurance companies seem to have the attitude that everyone exaggerates or fakes pain. In thousands of negotiations with insurance companies, I’ve heard them “poo-poo” clients’ complaints of pain. Pain alone won’t carry the day, either for settlement, or in court.
Learn why by reading on.
What do we mean by “No-Fault”?
Put simply, No-Fault refers to having your accident-related medical bills paid, up to $50,000, regardless of whose fault the accident is.
Two different things happen after a car accident. First: No-Fault insurance pays your medical bills and lost wages, except in certain instances involving buses, motorcycles and heavy trucks. No-Fault also protects pedestrians and bicycle riders. Second: This should not be confused with issues of liability in an accident, which are very much about who is at fault, and the focus of the second thing that may happen: a lawsuit. Let’s learn about No-Fault insurance and how it impacts your automobile accident case.
New York’s No-Fault law was enacted on December 1, 1977 and is found at Article 51 of New York State’s Insurance Law. Before the No-Fault statute, an accident victim could sue for any kind of injury and often did. The insurance industry wanted to cut down on the small strain and sprain cases that were flooding the courthouses and, hopefully, reduce auto insurance premiums, so it proposed a trade. Smaller cases would not be allowed to recover money damages, and in exchange, the insurance companies would pay medical bills for those injured in a car accident, regardless of fault – even if the injured person caused the accident. This may sound simple, but it is anything but.
The goal of the No-Fault law is to compensate for “basic economic loss” by paying medical bills and lost wages. Under No-Fault, in order to sustain a lawsuit for pain and suffering and such, you need what the No-Fault statute calls a “serious injury.” “Serious injury” is rather an unfortunate phrase as it implies a greater level of injury than required. One lawyer-commentator has said that it would have been far better for accident victims if the statute referred to a “qualifying injury” instead of a “serious injury.” The serious injury requirement is intended to keep smaller cases out of court, and is referred to as the No-Fault “threshold.” Frequently, it is used by insurance companies to keep deserving cases out of court, and lawyers not thoroughly familiar with the ins and outs of the No-Fault threshold can lose these cases, even when they shouldn’t.
You should not be surprised if I tell you that insurance companies are cheap with No-Fault insurance benefits: even though No-Fault benefits are supposed to help the injured person, and the injured person is less able to bring a court case because of the No-Fault law.
In many cases, the insurance companies nit-pick the amount of doctors’ bills submitted under the No-Fault law or refuse to pay them for no good reason. The insurance carriers may send out an accident victim’s medical records for “peer review,” where a doctor that has never examined or even met the injured person recommends denying treatment as “unnecessary.” Insurance companies are also quick to cancel No-Fault insurance benefits, which they are permitted to do after they hire a physician to examine the accident victim, if that physician finds that continued treatment would not benefit the accident victim. Would it shock you to learn that these physicians, paid by the insurance carriers, overwhelmingly find that further treatment is unnecessary and/or that the injured person is able to return to work, thus justifying the discontinuance of No-Fault insurance benefits? Ironically, these insurance carrier-sponsored physicals are called “Independent Medical Examinations” – they are certainly not “independent.”