The New York Comprehensive Automobile Insurance Reparations Act (also known as the no-fault law) took effect on Feb. 1, 1974. Legislators wanted to ensure that persons injured in an auto accident would receive prompt and sufficient medical treatment and income replacement without the burden of litigation.

The no-fault law provides a package of personal injury protection benefits and finances it with the removal of excessive pain and suffering damages, wasted-litigation expenses and redundant benefits payable under other social programs. As a result, persons injured in an auto accident give up some of their rights to sue for noneconomic damages in exchange for guaranteed benefits that are promptly paid regardless of fault. However, if the injury is severe enough to reach a “verbal threshold,” which is a list of nine injury types, an injured person might then pursue noneconomic damages.
PIP benefits emerge from the legislators’ promise of Basic Economic Loss for eligible injured persons, which consist of four types of compensation. The first three shown below are subject to a combined limit of $50,000, while the limit of the fourth is in addition to the $50,000 limit.

1. All eligible medical expenses incurred without time limitation;
2. Income loss payments up to $2,000 per month for no more than three years;
3. Other expenses incurred (e.g., housekeeping or transportation) up to $25 per day for not more than one year; and
4. Death benefit of $2,000, payable to the covered person’s estate.

Insurance companies must offer the choice of a family deductible in the amount of $200; they also may offer the choice of a $100 family deductible.
While eligible injured persons are guaranteed this Basic Economic Loss, it may not all be payable as PIP benefits. There could be other sources, such as workers’ compensation, state disability or Social Security benefits, which may contribute with your auto insurance to help compensate you for Basic Economic Loss.
Additional PIP coverage broadens the protection in two distinct ways: First, it expands the definition of eligible injured person to include passengers who are not residents of New York when injured outside of New York. Second, it adds another layer of limits (each of the four categories of Basic Economic Loss) to be paid as Extended Economic Loss.
The limit combinations that are available for you to choose from may vary by insurance company since each company is permitted to file its own group of optional limits, so don’t go it alone. Call our agency. We’ll be glad to review and explain the limits and combinations with you.