Is New York a No-Fault State?

Whenever you get behind the wheel in the Empire State, whether it’s to drive downtown to see a Broadway show, out of the city for an escape to the Hamptons, or simply to cart the kids to and from school, all drivers must ensure their policies meet the legal requirements in the state, including those mandated by the no-fault law. Let’s check out how the no-fault law affects New Yorkers, why it’s in place, and what no-fault insurance looks like on a New York car insurance policy.

New York auto insurance requirements mandate drivers to carry no-fault coverage because it’s a no-fault state. Drivers are required to carry no-fault coverage, otherwise known as a first-party medical benefit (FPMB). There are a few FPMBs on the market, but New Yorkers are required to have a minimum limit of one called personal injury protection (PIP). 

Drivers in the Empire State must have at least $50,000 in PIP per person on their auto insurance policies. This coverage will kick in if a policyholder is injured in an accident and requires assistance with their medical expenses, regardless of who caused the accident. In tort states, drivers must rely on each other for liability coverage to cover their medical expenses in the event of an accident. In such states, the at-fault driver’s liability coverage will help the victim cover their medical expenses. 

New Yorkers are still required to carry liability coverage, as accident victims use such coverage to help with their medical expenses after using all their PIP funds. New York auto insurance laws mandate 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 or underinsured motorist bodily injury coverage (UMBI/UIMBI) per person, $50,000 in UMBI/UIMBI per accident (25/50 UMBI/UIMBI), and $50,000 in PIP per person. Those who lease or finance their vehicles may be required to have collision and comprehensive coverages as part of their legally binding contracts. 

Driving without insurance in the Empire State is illegal, generally unwise, and unsafe. Those who fail to carry the required coverages may face consequences like fines, fees, license or registration suspension, or even jail time. High-risk drivers who have their license or registration suspended may need SR-22 insurance or high-risk insurance for several years after the offense, which can raise one’s premiums to double or triple the state average.

The Empire State is a no-fault state, so suing in New York for no-fault pain and suffering following an accident can be challenging. The no-fault law was enacted partly to limit the number of lawsuits following car accidents, as such cases can stack up in tort states where drivers can more freely sue one another. 

Typically, states enact no-fault laws to relieve the burdens placed on the insurance and court systems with a tort system. In tort states, a driver must be considered at fault before anyone can receive their insurance benefits. With a no-fault system, drivers rely on their own policies to receive financial assistance, speeding up the process.

In tort states, if the at-fault driver can’t cover all the victim’s expenses with their policy, they’re liable for the rest of the bill out of pocket. If they can’t cover the bill, the victim can sue the at-fault driver, which clogs up the court system. In no-fault states, drivers have fewer opportunities to sue each other because they carry coverage for their own expenses. 

States may enact no-fault laws to relieve the burdens placed on the insurance and legal systems, but it’s also essential to understand how the systems become overrun in the first place. States with no-fault laws often have high populations, densely populated cities, or high populations of uninsured drivers. These factors contribute to a higher-than-average likelihood of drivers getting into accidents and filing claims. 

New York City is the most populated city in America, so, naturally, the Empire State is a no-fault state. Without the no-fault law, very few drivers could access their insurance benefits, and the court systems would be heavily clogged. 

Drivers use their no-fault benefits in New York to help pay for their medical expenses after an accident, but residents aren’t required to carry no-fault property damage coverage. Drivers who have minimum coverage policies don’t have any coverage for their vehicles, as residents are only required to have liability coverage, UMBI/UIMBI, and PIP, all of which help the policyholder cover their medical costs or the victim cover their expenses in the event of an accident caused by the policyholder. 

In New York, drivers who want property damage coverage must carry a full coverage policy. Drivers can tailor full coverage policies to meet their needs, so those who desire property damage coverage may opt for comprehensive or collision coverage. 

The New York no-fault law requires all residents to carry no-fault coverage in the form of a FPMB called PIP. PIP helps the policyholder cover their medical expenses should they require care after an accident, regardless of who caused it. All residents with auto insurance policies must have at least $50,000 in PIP per person but may opt to add a higher PIP limit on their full coverage policies.

No-fault coverage is unique because it typically follows the policyholder instead of following the car. This is the case for PIP in New York, as the policyholder, their passengers, and immediate family can use their PIP coverage. However, anyone unnamed on the insurance policy may not use the coverage if they have their own policy. Policyholders can even use the coverage to help cover their bills if they’re injured by a vehicle as a pedestrian.

Let’s check out some of the other key details about New York’s no-fault law:

PIP is a rather expansive coverage and may contribute to a fair few of the policyholder’s medical expenses related to an accident. Some commonly covered expenses are:

No, New York has a no-fault statute, making it a no-fault state instead of an at-fault state. The key difference between the two is in the event of an accident, those who require medical care for their injuries in a no-fault state should file a claim with their insurance instead of the at-fault driver’s policy. In a no-fault state, the fault may eventually be assigned to a driver, but drivers default to their own policies before relying on the at-fault party’s coverage. 

While no-fault insurance can help protect you on the road, such coverage comes with a hefty price tag. Drivers in no-fault states typically pay higher premiums than those in tort states, and New York is no different. Since drivers in the Empire State are required to have a minimum PIP limit, New York is one of the country’s most expensive states for auto insurance. A full coverage policy in New York costs, on average, about $2,340 annually, or about 30% more than the national average of $1,670 annually. 

Getting the cheapest policy in the state can be challenging, but it’s not impossible. Many of the state’s top insurers offer base rates below the state average and plenty of discounts policyholders can stack to reduce their premiums further. 

Whether you’re new to the Big Apple, getting car insurance for the first time, or curious about how expensive it may be to raise your PIP limit, getting and comparing quotes online is the best way to see all the policies you qualify for in one place. By getting and comparing quotes from several insurers, you can choose the best policy for your lifestyle and budget.

Luckily, you’ve come to the right place for quotes. Here at Clovered, we have a free quoting tool you can use to access your unique rates in minutes. If you prefer to chat with a professional, one of our licensed agents will be happy to help you at 833-255-4117 or [email protected].