New York PIP Insurance Explained

PIP is a no-fault coverage because fault doesn’t need to be assigned before the policyholder can access their insurance benefits. Drivers carry PIP to cover various medical expenses they may incur due to an accident, regardless of who caused it. The details of PIP coverage can get a bit tricky, so let’s analyze this coverage type, how it works, and why drivers must have it on their New York auto insurance policies. 

Residents with auto insurance in New York State must have at least $50,000 in PIP per person on their policies. PIP is a common no-fault coverage that may be required in no-fault states, such as New York. Drivers with PIP file a claim with their own policies when injured in an accident to receive the benefits from this coverage.

Filing a claim with one’s own policy is a bit unheard of, as most U.S. states are tort or at-fault states. When an accident occurs in a tort state, drivers file a claim with the at-fault party’s liability coverage as they generally won’t have a first-party medical benefit (FPMB) like PIP to rely on. However, depending on liability coverage isn’t always the safest bet, as there’s no guarantee every driver on the road has adequate coverage.

While drivers must have at least $50,000 in PIP per person, they may raise their coverage limit to $100,000 per person. That’s not to mention the other FPMB available in the Empire State, medical payment coverage (MedPay), which drivers can add to their policies to cover their medical expenses, too.

The most significant difference between PIP and MedPay is what’s covered. PIP is generally more expansive than MedPay and covers a broader range of medical expenses. 

Yes, in New York, PIP coverage is required by law. All drivers in the Empire State must have at least $50,000 in PIP per person on their policies. Those who fail to do so are considered uninsured. Driving without insurance in New York is illegal, and the consequences include fines, license and registration suspension, and possibly even jail time. 

All drivers in New York must carry liability and no-fault coverages. Auto insurance laws in the Empire State require drivers to have at least $25,000 in bodily injury liability per person, $50,000 in bodily injury liability per accident, $10,000 in property damage liability per accident (25/50/10 liability coverage), $25,000 in uninsured and underinsured motorist bodily injury coverage (UMBI/UIMBI) per person, $50,000 in UMBI/UIMBI per accident (25/50 UMBI), and $50,000 in PIP per person. Those who lease or finance their vehicles may be required to have collision and comprehensive coverages on their policies. 

The minimum coverage limits in the Empire State are quite high compared to other states in the U.S. Additionally, PIP is a pretty pricey coverage, so the average car insurance policy in New York is higher than the national average. The average full coverage policy in the state costs about $2,340 annually, or 30% more than the national average of $1,670 annually. While drivers tend to pay more for their policies in New York, their policies offer far more protection than those in other states. 

All car insurance policies in New York have PIP limits for several reasons. First, New York is a no-fault state, which generally means drivers must carry a minimum limit of PIP or another FPMB. To understand why drivers in the Empire State must have PIP on their policies, drivers must understand why the state has a no-fault law.

States enact no-fault laws for three reasons: a high population, densely populated cities, or a high population of uninsured drivers. It’s no secret that New York City is the most densely populated city in the country. Thus, it makes sense the state is a no-fault state for auto insurance. 

Each of those factors leads to drivers having a higher-than-average chance of getting into accidents, filing claims, and suing each other. Thus overwhelming both the insurance and legal systems. So, instead of burdening those systems, states enact no-fault laws to speed up the process of receiving insurance benefits by requiring drivers to carry coverage for themselves and others, not just others. Thus, drivers can file a claim without waiting for the fault to be assigned in an accident and receive their PIP coverage much quicker than they would receive an at-fault party’s liability coverage.

PIP insurance in New York covers a wide range of the policyholder’s medical expenses related to a car accident, regardless of who was at fault. Coverage details may vary based on the insurer, but some commonly covered costs are hospital stays, doctor’s visits, ambulance rides, prescription medication, diagnostic tests, surgeries, psychiatric and physical therapies, loss of wages, essential services (childcare, housekeeping, etc.), and funeral costs. 

While the minimum limit of $50,000 in PIP per person will undoubtedly cover a fair amount of expenses, it’s no secret that hospital stays can get expensive fast. Those with full coverage policies may opt to raise their PIP limit up to $100,000 per person to cash in on all the protection available. While a full coverage policy may not be the cheapest in the state, binding a policy from one of the state’s top insurers offering low base rates and various discounts is a great way to save money without sacrificing your safety.

According to the auto insurance laws in the state, drivers in the Empire State must have at least $50,000 in PIP per person, and anything else is considered additional PIP coverage in New York. Drivers must carry PIP under the no-fault law, which mandates a minimum limit of no-fault coverage for all drivers. 

Like every law, New York’s no-fault law has caveats. For example, drivers who want to use their PIP coverage must have injuries deemed “serious” by their doctors and insurer. Another stipulation of the law is that PIP can only be used to recover lost wages of up to $2,000 or 80% of one’s monthly salary, whichever is less. 

Another caveat to the no-fault or PIP law is that PIP coverage follows the driver instead of the car. So, if a policyholder permits a friend to drive their car, the friend can’t access the policyholder’s PIP coverage. This is why it’s essential to have an insurance policy whenever you get behind the wheel in the Empire State; you won’t be protected if you cause an accident unless you have the minimum required PIP coverage.

The New York PIP statute of limitations is three years. This means that policyholders injured in an accident have three years to file a claim and access their PIP funds to help them cover the medical expenses related to that accident. Many no-fault states have a three-year statute of limitations for PIP. 

Whether you’re a transplant or a born New Yorker, all drivers in the state have two things in common: they must have PIP on their policies and want the best policy for their needs. The best way to ensure you meet both those goals is to get and compare quotes online. You can choose the best policy for your individual needs and wallet by getting and comparing quotes online.

Lucky for you, we’re quoting experts here at Clovered. We even have a free quoting tool you can use to access your unique quotes in minutes. If you prefer to chat with a professional, one of our licensed agents can assist you at 833-255-4117 or [email protected].