Auto Insurance Claims in New York: No-Fault, Liability, and Your Rights

Legal Disclaimer: This guide is for general informational purposes only and does not constitute legal advice. Every situation is different — the information here may not apply to your specific circumstances. Reading this guide does not create an attorney-client relationship. For advice about your individual situation, consult a licensed attorney.

Auto Insurance Claims in New York: No-Fault, Liability, and Your Rights

After an accident, the insurance claims process can feel overwhelming. You are dealing with multiple insurers — your own, the other driver’s, and possibly others — all with their own deadlines, forms, and procedures. Understanding how New York’s insurance system is structured, what you are entitled to, and what tactics insurers commonly use helps you protect your claim from the start.

This guide walks through no-fault benefits, liability claims, the rules insurers must follow under New York law, and what to do when a claim is disputed.

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New York’s No-Fault System: The Foundation

New York has operated under a no-fault insurance system since 1974, governed by Insurance Law §§5101–5109 and implementing regulations at 11 NYCRR Part 65. Every registered vehicle in New York must carry Personal Injury Protection (PIP) coverage with a minimum limit of $50,000 per person.

The no-fault system was designed to provide fast, automatic compensation for economic losses after accidents, reducing the need for litigation. In exchange, the ability to sue for pain and suffering is restricted to cases meeting the serious injury threshold.

Who Is Covered

Under Insurance Law §5103, PIP covers:

• The named insured and household relatives injured in any motor vehicle accident
• Passengers in the insured vehicle
• Pedestrians struck by the insured vehicle

Coverage applies regardless of fault — your PIP pays your bills whether or not you caused the accident.

What No-Fault Pays

Benefit	Amount	Cap
Medical expenses	100% of reasonable and necessary costs	Subject to fee schedule
Lost wages	80% of gross wages	$2,000/month, up to 3 years
Other expenses	Reasonable expenses attributable to the accident	$25/day
Death benefit	Funeral and burial expenses	$2,000

New York uses a medical fee schedule (established under the Workers’ Compensation Law) to determine reasonable charges for medical treatment under no-fault. Providers must accept these scheduled rates as payment in full and cannot balance-bill you for the difference.

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Filing a No-Fault Claim

Step 1: Notify your insurer. Report the accident to your insurer as soon as possible. Your policy requires prompt notice.

Step 2: Submit the NF-2 Application. File the NF-2 Application for No-Fault Benefits within 30 days of the accident. This is a strict deadline. The form asks for basic information about the accident, your injuries, and your treatment providers.

Step 3: Authorize release of records. You will need to sign medical authorizations allowing your providers to bill the insurer directly and providing the insurer access to your medical records.

Step 4: Attend all scheduled IMEs. If your insurer requests an Independent Medical Examination, you must attend (with reasonable notice) or risk suspension of benefits.

Insurer’s obligations under 11 NYCRR §65-3:

• Acknowledge the claim within 15 business days of receiving notice.
• Pay or deny claims within 30 days of receiving all requested verification.
• Pay overdue claims with 2% monthly interest if they fail to meet the 30-day deadline.
• Provide a written explanation for any denial.

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The Liability Claim: Suing the At-Fault Driver

While no-fault handles your economic losses, a third-party liability claim (against the at-fault driver’s insurer) is the path to recovering:

• Pain and suffering
• Medical expenses above your PIP limits
• Lost wages above the PIP cap
• Permanent disability and disfigurement

To pursue a liability claim, you must establish:

1. Negligence: The other driver breached their duty of care (e.g., by running a red light, speeding, or distracted driving).
2. Serious injury: Your injuries meet the threshold under Insurance Law §5102(d).
3. Causation: The driver’s negligence caused your injuries.
4. Damages: Quantifiable losses.

New York requires all auto policies to carry minimum bodily injury liability of $25,000 per person / $50,000 per accident under Insurance Law §3420(a). These minimums are extremely low given current medical costs — a single emergency room visit and surgical procedure can exceed them. This is why your own SUM (Supplementary Uninsured/Underinsured Motorist) coverage is so important.

A qualified personal injury attorney can assist injured Long Islanders in maximizing recovery from all available insurance sources, including identifying excess policies and umbrella coverage that defendants often do not disclose voluntarily.

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Uninsured and Underinsured Motorist Coverage

Uninsured Motorist (UM) Coverage

Required by Insurance Law §3420(f), UM coverage pays you when:

• The at-fault driver has no insurance
• The at-fault driver flees the scene (hit-and-run, with physical contact requirement)

Minimum required UM: $25,000 per person / $50,000 per accident.

Supplementary Uninsured/Underinsured Motorist (SUM) Coverage

SUM coverage — optional but strongly recommended — pays when the at-fault driver’s liability limits are insufficient to cover your damages. For example:

• At-fault driver’s liability limit: $25,000
• Your damages: $200,000
• Your SUM coverage: $100,000

In this scenario, you collect $25,000 from the at-fault driver’s policy, then make a SUM claim against your own insurer for the remaining $100,000 (up to your SUM limit, minus the $25,000 already collected).

To make a SUM claim, you must provide your insurer with written notice and an opportunity to associate in the defense of any lawsuit against the at-fault driver. Failure to follow your policy’s SUM claim procedures can result in forfeiture of SUM benefits.

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Bad Faith Insurance Practices

New York’s Insurance Law imposes duties on insurers to handle claims fairly. While New York does not have a private right of action for insurance bad faith the way some states do (there is no standalone bad faith tort), several provisions protect policyholders:

• Insurance Law §2601 prohibits unfair claims settlement practices, including: failing to acknowledge claims promptly, misrepresenting policy provisions, not attempting in good faith to effectuate prompt and fair settlement of claims where liability is reasonably clear, and compelling litigation by offering substantially less than a claimant is entitled to recover.
• The New York Department of Financial Services (NYDFS) regulates insurer conduct and accepts complaints through its website.
• 11 NYCRR §65 governs no-fault claims handling and imposes specific procedural obligations with financial consequences (2% monthly interest) for non-compliance.
• Insurance Law §3420(d): When an insurer disclaims liability or denies coverage, it must provide written notice to the policyholder as soon as is reasonably possible. Failure to timely disclaim can result in a waiver of the coverage defense.

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Common Insurance Company Tactics

Understanding how insurers approach claims helps you avoid common pitfalls:

Quick Settlement Offers

An adjuster may contact you within days of an accident with a settlement check. This typically happens before you know the full extent of your injuries. Once you sign a release, your claim is closed. Do not accept any settlement from the at-fault driver’s insurer until your treating physicians have given you a prognosis and you understand your future medical needs.

Recorded Statements

The other driver’s insurer may request a recorded statement. You are not legally required to give one to the opposing insurer. Anything you say will be used to minimize your claim — ambiguous statements about pain levels, how you felt “right after” the crash, or who may have had a yellow light will be interpreted in the insurer’s favor.

IME Denials of Treatment

Your own insurer’s IME doctors often conclude that further treatment is not medically necessary. This is a standard tactic to cut off no-fault benefits. You can challenge an IME cutoff through no-fault arbitration, and your treating physician’s records and opinion are the primary counter-evidence.

Comparative Negligence Arguments

Adjusters routinely suggest you were partially at fault to reduce the settlement value of your claim. In New York, fault is apportioned — so reducing your apparent fault percentage matters financially.

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Minimum Insurance Requirements in New York

Coverage	Minimum Required	Statute
Bodily Injury Liability	$25,000/person, $50,000/accident	Insurance Law §3420(a)
Property Damage Liability	$10,000/accident	Insurance Law §3420(a)
No-Fault/PIP	$50,000/person	Insurance Law §5103
Uninsured Motorist	$25,000/person, $50,000/accident	Insurance Law §3420(f)

These are minimums — higher limits are available and advisable. Given New York’s medical costs and litigation environment, carrying limits of at least $100,000/$300,000 for liability and matching SUM coverage is widely recommended.

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Property Damage Claims

Property damage claims — repair or replacement of your vehicle — are handled separately from injury claims. You can claim property damage under:

• The at-fault driver’s property damage liability coverage (minimum $10,000)
• Your own collision coverage (if you have it), subject to your deductible

If you use your own collision coverage, your insurer will seek subrogation (reimbursement) from the at-fault driver’s insurer after paying you.

Do not let an insurer “total” your vehicle and pay you less than its fair market value. Research your vehicle’s actual cash value using comparable sales, and dispute the valuation if it is too low.

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Appealing a Denied Claim

If your no-fault claim is denied:

1. Request the denial in writing with the specific reason.
2. Submit additional documentation addressing the denial reason (additional medical records, a treating physician’s narrative).
3. Request no-fault arbitration through the American Arbitration Association (AAA). No-fault arbitration is a formal but relatively accessible process for resolving disputes without a full lawsuit.
4. File a complaint with the New York Department of Financial Services if you believe the insurer violated Insurance Law §2601.

If your third-party liability claim is disputed or rejected, the path is filing a personal injury lawsuit in New York Supreme Court (for damages over $25,000) before the statute of limitations expires.

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Consulting an Attorney About Your Claim

If you are dealing with a denied claim, a low settlement offer, or injuries that exceed your PIP limits, talking to a qualified attorney helps you learn about your legal rights under New York law and understand what additional recovery may be available.

This guide is for informational purposes only and does not constitute legal advice. Laws change; consult an attorney for advice specific to your situation.