New York No-Fault Benefits: What the $50,000 Covers

By the FigureMyTax Editorial Team · How we calculate

New York no-fault pays up to $50,000 per person of basic economic loss, whoever caused the accident: necessary medical and health expenses, lost earnings up to $2,000 a month for three years, and other reasonable expenses up to $25 a day for one year. Benefits are reduced by 20 percent of lost earnings.

Medical and health expenses

N.Y. Insurance Law 5102(a)(1) covers all necessary expenses for medical, hospital, surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; psychiatric, physical therapy and occupational therapy and rehabilitation on referral; non-medical remedial care under a recognized religious method of healing; and any other professional health services, without limit as to time if it is ascertainable within one year after the accident that further expenses may be incurred. Charges are limited by section 5108 to the workers' compensation fee schedules, except in unusual circumstances.

Lost earnings

Paragraph (a)(2) covers loss of earnings from work you would have performed, and reasonable expenses for services in lieu of those you would have performed for income, up to $2,000 a month for not more than three years. An employee who receives employer-paid benefits that leave income and future benefits unreduced is not entitled to benefits for that loss. Under subsection (b), first party benefits are reduced by 20 percent of lost earnings.

Other expenses and offsets

Paragraph (a)(3) covers all other reasonable and necessary expenses up to $25 a day for not more than one year. First party benefits are also reduced by amounts recovered or recoverable under social security disability, workers' compensation, disability benefits law or Medicare, and by policy deductibles. An optional additional $25,000 can be bought for lost earnings and therapy after the first $50,000 is exhausted.

Payment and disputes

Section 5106 says benefits are paid as the loss is incurred, are overdue if not paid within 30 days after proof of the fact and amount of loss, and bear interest at two percent a month; a claimant who has a valid overdue claim may recover a reasonable attorney's fee, and every insurer must offer arbitration of disputes.

Using the calculator

A worked example: with $30,000 of medical bills and $4,000 of monthly earnings lost for four months, earnings count up to $2,000 a month, or $8,000, so basic economic loss is $38,000; after the 20 percent reduction of $1,600, benefits are $36,400. Run your own numbers in the New York no-fault calculator, then read the serious injury threshold and the insurer lien rules. If the other driver has little insurance, see New York UM/UIM stacking.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how New York's rules apply to your specific case with a licensed New York attorney.