New York is a no-fault state when it comes to auto insurance. It’s a term you’ve probably heard before, likely when buying a new policy. But what does it actually mean if you end up in a crash?

Here is an explanation.

Who is responsible? Your policy will pay first in any case.

Under New York law, an auto insurance policy must include minimum coverage for three components. One of those components is no-fault coverage (also referred to as Personal Injury Protection). Under a no-fault system, if you are driving and get in a crash, your own auto insurance policy will reimburse you for:

  • Medical and health expenses
  • Lost earnings
  • Certain other “reasonable and necessary expenses” tied to the injury

This happens regardless of if you were at fault and caused the wreck, or if it happened as a result of another party’s negligent actions. (There are a few exceptions however, including if you were driving while intoxicated and that contributed to the wreck.)

The other driver’s insurance will cover the same economic losses for them. No-fault insurance also generally provides coverage for family members that live with you, any passengers that were in the vehicle and pedestrians.

Can you sue beyond that?

One of the advantages to a no-fault insurance system is that it generally provides compensation for injured victims quickly. However, these payments are normally capped at $50,000 under basic no fault coverage. So what happens if you suffer serious injuries with costs far beyond that dollar amount?

If the crash was the fault of another person, you may be able to sue their insurance company in order to recoup additional costs. New York law limits these types of actions, allowing them only in cases of a serious injury, such as:

  • Dismemberment
  • Significant disfigurement
  • A fracture
  • Loss of a fetus
  • Permanent loss of use of an organ, member, function or system

There is also an exception for certain injuries or wounds that leave a person unable to live their daily life normally for a period of time – something that often requires legal counsel to help effectively demonstrate.