What Is No-Fault Auto Insurance, and How Does It Work?
A no-fault provision in your auto policy literally means you get benefits regardless of who was at fault in an accident. New York is a “no-fault state,” which means that all auto insurance policies sold in the state must include basic no-fault benefits.
You may assume that if you were not at fault, the other vehicle’s insurance should pay your medical bills. This is not so. In New York, coverage comes from the vehicle that you occupied, period. If you are a pedestrian or bicyclist, the other vehicle will pay no-fault benefits, and if it was a hit and run, you can use no-fault to apply to your own insurance company for benefits. If you were on a common carrier, such as a bus or a train, you can still apply for benefits under your policy.
If you are injured, it is absolutely vital to give your no-fault insurance information and claim number to the hospital and any other medical provider you see. If you provide your health insurance information instead, it is very difficult to unravel the billing mess later on.
Every New York auto policy carries a minimum of $50,000 of coverage for medical bills and lost wages. Lost wages coverage is for 80% of lost earnings up to $2,000 a month, for up to three years. You can add up to $100,000 to your no-fault coverage by electing to pay more on your premium, which is a wise thing to do. Serious accidents often run up huge bills, and if your coverage is insufficient it can create unmanageable debt.
Medical bills submitted to no-fault are regulated by the Department of Financial Services. Rates are set by the State of New York, and healthcare providers must comply with no-fault rates just as they comply with scheduled fees for Medicare and Workers Compensation claims.
If your provider bills for more than they are entitled to, the insurance company will reject the bill and send a letter declining payment. Do not let these letters scare you into thinking your bills will not be paid. Very often the healthcare provider needs to correct the bill and re-submit it. If a provider asks you to pay, they are violating New York State law.
If your auto insurance company refers you to a healthcare practitioner for an in-person examination, you must go, as often as the insurance company requests. This often happens two to three months after the accident, which is when the no-fault statute establishes a deadline to determine whether or not you have a serious injury. The practitioner is supposed to be an independent third party who will assess your need for continued benefits. Many times, the practitioner that you are sent to will have a large waiting room filled with many people who are also there for examinations. The exams typically take only a few minutes and are not as in-depth as they should be. The time spent in the waiting room will be much longer than the exam itself.
If the insurance company’s report says you no longer need benefits, you can use your health insurance, pay out of pocket, or obtain treatment based upon a lien created by the healthcare provider.
There are many other intricacies involved in no-fault benefits.
James Leonick has nearly 30 years of experience dealing with these issues and can answer all of your questions, so please call for a consultation.
James F. Leonick
Leonick Law, P.L.L.C.
TEL: (631) 486-9500