No-Fault Insurance

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No-Fault Insurance
2011-06-05 18:09:50
no fault insurance

No-Fault Insurance
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  1. General
    • No fault insurance scheme is designed to divert relatively small-stakes auto accident cases from the negligence system.
    • --Rather than litigating against the other insurance company, you just go to your own insurance company.
    • --Can recover whether a one- or two-car accident, regardless of negligence.

    Car specific. If a two car accident, all parties look to the policy applicable to their own car (or the car they were riding, etc).

    • Covers personal injury costs.
    • --Not damage to car (but you can go after other insurer for that).
    • --Compensatory only. Never includes pain and suffering.

    Portable. NY state policy and have an accident out of state; can still pursue your no-fault remedy.
  2. When Injured Party Can Collect Under No-Fault Policy
    • Owner’s no-fault policy covers:
    • --Owner;
    • --Other drivers;
    • --Passengers;
    • --Pedestrians.

    • Does not cover:
    • --Drunk drivers;
    • --Drag racers;
    • --Car thieves;
    • --Fleeing felons.

    Can collect under no-fault to the max of the policy limit. Minimum no-fault policy is $50k.
  3. When Injured Party May Sue In Tort
    P demonstrates injuries exceed statutory threshold. Two thresholds:

    (i) Suffered “serious injury.” Includes



    --Significant disfigurement;

    --Serious fracture;

    --Permanent and total loss of a bodily organ or bodily function.

    (ii) Damages in excess of “basic economic loss”

    --= sum of medical expenses + lost income (to max of $2k/mo) + $25/day.

    --The sum must be higher than $50k.

    (Suing doesn’t mean you waive your right to access the no-fault policy proceeds.)