No-Fault’s real name is PIP or Personal Injury Protection.
While you’ll most commonly see this coverage listed on your policy as personal injury protection, PIP also goes by its street name, New York No-Fault insurance. That nickname is the root cause of so much confusion. The easiest way to clear up the misunderstanding is to explain exactly what “no-fault” really means.
No-Fault, or more appropriately, personal injury protection, is a section of mandatory coverage on your auto insurance policy. PIP provides specific benefits, as we’ll explain, to those injured in a car accident. These benefits are paid by the insurance company covering the vehicle you were in, regardless of who is at fault.
Suppose you drive I-690 through Syracuse, and another driver joins your lane before seeing you in it. An accident happens, and both you and the other driver are hurt. Even though it was the other driver’s fault, your injuries will be handled solely by your insurance company.
The takeaway here is that fault is not considered. Every injured person returns to the insurance carrier for the car they were occupying. Somewhere along the line, the title of No-Fault became the term to describe this. It has since taken on countless inaccurate definitions, so let’s dig into the correct one.
Who does Personal Injury Protection cover?
Like your car insurance’s bodily injury liability, PIP coverage is policy-wide. Each New York State registered vehicle insured on a personal auto policy is equally covered for PIP. Thus, almost everyone who drives or rides in your vehicle is covered by your insurance.
We say almost everyone because there is one scenario where they would not be covered. If a non-resident of New York drove your car out of state and was in an accident, that person would have no PIP coverage.
PIP also covers pedestrians and bicyclists. Specifically, your PIP. If you hit a pedestrian with your car, your PIP coverage would respond before anything else.
It is also what covers you and your immediate household family members if injured while on a bus, including a school bus. So, if you have school-aged children riding the bus, it’s your PIP covering them!
How does Personal Injury Protection cover me?
This mandatory coverage was designed to streamline the process for those hurt in an accident. It removed attorneys, litigation, and general disagreement between the opposing insurance carriers. The personal injury protection law provides a smoother path toward recovery.
But the state realized in the 1970s, when PIP was first conceived, that doctor and hospital bills were only part of the equation. Injured people were also losing money by missing work. They were also spending additional funds on account of the accident.
Thus, a full suite of benefits was agreed upon, which now make up your basic PIP coverage. The total amount available is limited to $50,000 per injured person. You could encounter a deductible requirement before your coverage kicks in.
Carriers can apply up to a $200 family deductible, so check your policy. If you are new to deductibles, read our article about how deductibles work on your car insurance. To use your no-fault coverage, you must file a claim within 30-days of the accident.
The coverage can be used to pay the following expenses:
Medical expense coverage
Any medical expenses related to the accident are covered here. This includes costs for paramedics, hospitals, doctors, specialists, labs, medical rehabilitation, occupational therapy, etc. Death is also covered, and there is an extra $2,000 benefit for final expenses.
Loss of income coverage
If your injuries are too severe, you might have to miss work. There is a benefit of up to $2,000/month for your lost income. There is a simple formula used to determine how much you can receive. The state allows you to claim 80% of your lost monthly income but caps your payment at $2,000. This benefit will last up to 3-years or until all the $50,000 is depleted. This section of coverage cannot be used unless you’ve also incurred medical expenses.
Other necessary expense coverage
After an accident, you might incur costs not related to medical bills or wage reduction. If you broke both hands, you might have to hire a landscaper or a transportation service to get you places. This coverage portion will provide up to $25/day for these expenses. As with loss of income, you must have medical expenses to use this part of the coverage.
Can’t I just use my health insurance?
That’s a great question and not one that gets asked enough. Many people would be surprised to find out that upon arriving at the hospital, they’d be asked for their auto insurance information! That is because your health insurance is considered secondary coverage.
To use your health insurance, you would first need to use up all your PIP. Once that is gone, you can begin using your health plan.
In most cases, this is an excellent advantage. Your health insurance won’t pay you for lost income or reimburse you for other expenses as PIP can. Most health insurance plans also have high deductibles and co-payment requirements. PIP coverage eliminates that, so you don’t have to shoulder the burden of countless bills after an accident.
Can I get more than just the basic New York no-fault insurance coverage?
$50,000 might not be enough to cover all your expenses. That’s why the state approved additional options for adding to the mandatory coverage. Remember, unlike the basic PIP coverage, these are not automatic. You must ask for them to be added to your policy before an accident happens. There will be extra costs like any other increase in coverage, but they are usually minimal for these upgrades.
OBEL – Optional Basic Economic Loss
You can consider OBEL to be your flexible money. It provides a flat $25,000 benefit which can be applied toward your medical expenses, lost wages, or related expenses. It will not apply to all of these at once, however. You will be asked to select which of these options you’d like to apply the coverage toward. Like basic PIP, OBEL coverage is automatically extended to passengers and pedestrians hurt in the accident.
Additional Personal Injury Protection (APIP)
APIP provides extra medical expense coverage. It can be purchased in blocks of $25,000, but $50,000 blocks are the most common. The amount available will range per carrier, but most companies limit it to $100,000.
Besides the increased medical expenses, APIP provides further coverage for wage loss. Whereas mandatory PIP provides up to $2,000/mo in lost wages, APIP can double it to $4,000, but the same 80% rule applies.
For example: If you earn $5,000/month in gross wages, you’d be entitled to up to 80% reimbursement. Therefore, you’d receive $4,000. However, if you earned more than $5,000, the most you could receive is capped at $4,000.
APIP also doubles the other necessary expense benefit from $25/day to $50/day. So, if you have had to hire additional help after the accident, this can be a worthwhile upgrade.
You can take APIP with you
Additional Personal Injury Protection can follow you into another person’s car. It would apply if the other person carried less than you do in total PIP benefit. If the other person only had the basic coverage, your APIP could be used after it was exhausted.
Can my no-fault coverage ever be denied?
Certain things can cause an insurance carrier to void your PIP coverage. The law is specific on this, so thankfully, it’s straightforward. The following are excluded from no-fault protection:
- Motorcycle drivers and passengers
- Operating a vehicle while intoxicated
- Driving while in the act of committing a felony or eluding the police
- Driving or riding in a known stolen vehicle
Will PIP claims cause my insurance premium to go up?
This is one bad mark against personal injury protection coverage because a claim can count against you. Insurance carriers are allowed use past PIP claims as a pricing factor. If you, or any residents in the house, have made a PIP claim within the last 3 – 5 years, your premium will be higher.
It can be frustrating since you are required to use your own insurance regardless of whose fault it was. One minute you were lawfully idling at a stoplight, and the next, you were riding in an ambulance. Yet, that ride was paid for by your insurance company and is now part of your claim history.
Some carriers will even deny you a policy if you’ve had multiple PIP claims within the past few years. One of them is a nationally known company.
There isn’t much to be done about this part. You could run for a political office and make it your life’s mission to change! You’d have our vote.
Of course, claims aren’t the only things that affect your car insurance premium. Read our article on all the information insurance companies need from you to offer a policy.
Can I still sue the other driver?
You can sue the other driver if your injuries exceed the coverage afforded under PIP, OBEL, and APIP. Suppose you’ve suffered significant injuries like a loss of a limb, disfigurement, loss of a fetus, or loss of a bodily organ, amongst others. In that case, legal action is probably in your future.
If you used any amount of your APIP coverage, your insurance carrier might be entitled to reimbursement. Any funds you receive because of a judgment or settlement can be reduced by the amount you received in APIP.
If you are badly injured in an accident, be sure to consult with a reputable personal injury attorney.
How can I tell how much PIP coverage I have?
Insurance carriers list all your car insurance coverage on a declarations page. You’ll want to check this to find out how much PIP you have. Your declarations could be as few as one page or 5 or more pages. This will depend on the carrier and the number of vehicles on your policy.
Look for the phrase Aggregate PIP Benefits Available, and you will see a dollar amount listed. That is how much you have. If you only see $50,000, you’ve added nothing beyond the mandatory benefit.
To find out what it would cost to increase your PIP coverage, reach out to your agent, or contact us directly. We will assist by completing a policy review that will include the different PIP options available to you. You can begin by tapping the Get a Quote button below, and one of our insurance pros will reach out soon.
If you have other questions or comments, please get in touch by using the Contact Us feature below or see our article on how to get car insurance. We look forward to hearing from you!