How do Car Insurance Claims and Settlement Work in New York?

A car accident can be devastating. It can leave you wondering how you will pay for medical bills, vehicle repairs, or even replacement of your car – not to mention the lost income and other factors that often worsen things!

While some car accident cases in NY go to trial, most are settled out of court. According to New York’s no-fault system, the state law requires motorists to carry a mandatory PIP coverage of $50,000. It also mandates them to carry at least $10,000 for property damage per accident, $25,000 for bodily injury to one accident victim, and $50,000 for bodily injury to all accident victims per incident.

NY is a no-fault state: What is a no-fault state?

In a no-fault state, you file your compensation claim directly with your own insurance company rather than the other driver’s insurance carrier. You rely on your own Personal Injury Protection (PIP) policy to recover damages up to the policy’s limit. Your insurance carrier will indemnify you for economic losses suffered, regardless of the party responsible for causing the accident.

Stepping outside of New York’s no-fault system can be permitted under some special circumstances.

Exceptions that might make you ineligible for no-fault PIP benefits include:

  • Driving while intoxicated(DWI) or driving under the influence (DUI)
  • Deliberately crashing your car
  • Injured while committing a crime
  • Injured while (knowingly) riding in or driving a stolen car
  • Injured while driving an uninsured vehicle

If you were involved in an accident as a motorcycle rider, regrettably, the no-fault benefits do not apply to your case. In this case, having private health insurance coverage would come in handy! However, a passenger is covered by the host driver/owner’s no fault coverage.

The NY City and State no-fault insurance rules do not cause you lose the right to pursue other legal settlements for your serious injuries and losses. If your circumstances meet certain criteria determined by NY insurance law, you can sue the party that caused your injuries or wrongful death damages in a car accident. 

The No-Fault Application

The New York No-Fault Law entitles victims of motor vehicle accidents to benefits or reimbursement for their basic economic loss. The NYS FORM NF-2 is an application form that must be completed to apply for these no-fault benefits. The Motor Vehicle Accident Indemnification Corporation determines eligibility with this paperwork. Based on the information given it will decide whether you are entitled to any payment under the specific law.

You can download the NY State form NF-2 (the No-Fault application form) from the Department of Financial Services’ site.

In the form, you’ll provide the following pieces of information:

  • Personal details: name, address, phone numbers, social security number, date of birth
  • The accident details: the place it occurred, its short description, date, and time
  • General information about the injuries suffered
  • Description of the vehicle: its owner’s, type, make, and year of manufacture.

You will have to indicate whether you were:

  • the driver of the car
  • a passenger
  • a pedestrian
  • one of the policyholder’s households or relative

You also need to provide information about the clinic or doctor who treated you after the accident. Specify the hospital’s name, date of admission, and address. Moreover, you must specify the cost of your medication and carefully think on other matters such as whether:

  • you are likely to need more medical treatments in future
  • you were in the course of your official employment at the time of the crash
  • you have lost some work time 
  • you have resumed your employment duties, stating the date of return to work and the lost time from work

You will also have to provide information regarding your average weekly income, the number of days you work per week, the number of hours you work per day, and your employer’s details.

If you incurred any other expenses that resulted from your injuries, you should explain them and state the bills for such expenses. Finally, you will have to indicate whether you are eligible for payment under worker’s compensation or the NY State Disability benefits.

New York's car insurance requirements

New York State requires all motorists to carry PIP insurance. Without it not only can you be fined and risk a criminal record, but if your lack of coverage leads to an accident, the victim may have grounds for civil action against you. Always keep physical proof of coverage on hand and keep it within reach to avoid hefty fines or worse consequences altogether!

 The minimum requirement for liability coverage in NY is as follows:

  • $25,000  personal injury liability coverage per person ($100K for livery vehicles in NYC)
  • $100,000 for wrongful death injuries per accident
  • $50,000 for wrongful death injuries per person
  • $10,000 property damage protection per occurrence
  • $50,000 PIP—no-fault insurance
  • $50,000 per incident or $25,000 per person for underinsured and uninsured and motorist coverage


An accident may result in losses that are more than the minimum requirements. If the losses suffered in a car accident exceed your insurance limit, the excess is coming out of your pocket. Car accidents can be costly. It is important to review your insurance coverage policy and make sure that you are sufficiently covered.

What NY PIP insurance covers

PIP covers medical expenses from an auto accident and lost wages if a person cannot work because of the injuries they sustained. It also pays for pain and suffering compensation, but not punitive damages that are designed to punish the at-fault driver.

Aside from Personal Injury Protection, your insurance policy may cover other types of losses. Some coverages are optional.

  • Comprehensive Coverage: covers your car against non-accident-related damages, for example, theft and vandalism.
  • Collision Coverage: covers property damage to your car up to its fair market value. Collision Coverage is mandatory if you are financing or leasing a car.
  • Uninsured Motorist Coverage: It entitles you to compensation (in accidents with uninsured vehicles) through your own insurance policy instead of another driver’s liability coverage (to the difference between your policy and the other driver’s policy). So if the other driver has a $25,000 policy and your have $100,000 SUM, if you sustain over $100,000 in personal injuries, you can recover the first $25K from the other driver and then the $75K difference from your own insurer. Unless you opt out when getting your auto policy, most policies are now required to carry SUM coverage.

What to do after a car accident

There are important measures to take after a car crash to protect your claim.

  • Call the police to be sure that an accident report to taken.
  • Take photos of at the scene of all vehicles involved and of the scene.
  • Don’t relocate any evidence. You only need to capture it on video or take photos of the accident scene while leaving everything intact and not moving the vehicles.
  • Take eye witness testimony, including their name and contact details
  • Get information about their other driver, including their DL number, their insurance details, and their contact information.
  • Seek experienced legal aid
  • Get medical attention


Want some more tips on what to do when you are he victim of a car accident? Check out our other blog post at

Investigation of the claim

After filing (or even before you file) a claim with the other motorist’s insurance carrier, they’ll conduct their own investigation of the car crash. It can include:

  • Examining the police report
  • Consulting with medical experts.
  • Interviewing witnesses
  • Consulting with car crash specialists

Expect the insurance company, their attorneys, or adjusters to attempt to find every chance available to deny or devalue your claim. That is their job. Therefore, we suggest you obtain an attorney and have your attorney respond to the other insurance company’s inquiries to avoid being mislead or be taken advantage of.

Denial of your claim

After completing their investigation, the insurance company will either approve or deny your claim.

There are cases where carriers outright deny claims. The insurer can deny the claim if they think the policyholder wasn’t at fault. They also often do it for procedural reasons. However, it is possible to restore your unfairly denied claim. In these situations, it can be helpful to hire a lawyer.

Claim Settlement Offer

If your claim is not rejected, the insurance carrier will likely make a settlement offer. The first offer is typically an attempt to make you accept a low settlement which is not often the full value of injuries.

If you accept the offer, they’ll insist you sign a waiver that prevents you from going to court to file a civil lawsuit. Be extra careful! It is best to consult a lawyer before signing anything.

Settlement Negotiations

A lawyer can also help with claim valuation. While it may be easy to quantify lost wages and medical bills, future medical treatments and lost earning ability may be hard to value without expert help. Also, past and future pain and suffering compensation often is guided by prior case law with similar injuries. Lawyers are most familiar with the current case law on valuation and will generally protect you from selling your case short. They add value to your own settlement. Remember that settlements are almost always paid by the defense insurer, not the other driver.  

Car Accident Settlement mediations in NYC

Mediation is one of the forms of ADR (alternative dispute resolution). If you can’t strike a deal with the car insurance carrier, any party to the case can request the assistance of a mediator to help settle a claim. The mediator’s role is to bring the opposing sides together and help them reach a deal. Unlike with arbitration, a mediation is not binding and either side can walk away at any time if they are not satisfied with the negotiations or proposed resolution.

Arbitration of a Car Accident Settlement

Arbitration, just like mediation, is an ADR process. However, the arbitration results are binding. The arbitrator listens to the case, much like a judge, and makes a final decision without the rigidities and formalities that are a feature of a formal court process.


If you have been injured in an accident and are seeking compensation, it is important to take the time to understand how car insurance claims work. For more information about your legal rights after a NY auto accident or other injury claims, contact us today. We can help answer any questions you may have about what happens next with your case without charge. Contact us today for a free consultation at 516-294-2664 or 718-416-1500.

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