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NY Bar Exam Review - No-Fault Insurance


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What is No-Fault Insurance in NY?
NY No Fault Insurance is a scheme designed to divert small stakes auto cases from the courts and let injured people have a simple and straightforward claim against an insurance company.
How does no-fault insurance work?
All injured parties in auto cases will simply look to their insurers. You don't need to prove fault, so even a faulty party can recover.
What is the task on the bar with respect to no-fault insurance?
1) When you have a valid no-fault claim against your insurance company;
2) When your right to sue in negligence is barred
(These are mutually exclusive)
What is the underlying assumption of the scheme?
Doesn't work unless people have insurance; therefore, auto insurance in NY is mandatory.
What types of insurance coverage do you need in NY?
1) Liability coverage (for big accidents); and
2) No-fault coverage (for small accidents).
What types of damages does no-fault scheme apply to?
Only to personal injuries, NOT to property damage.
NOTE: can also have collision insurance for property damage, or you can bring a negligence claim for property damage.
Who can claim a no-fault claim in a small accident?
1) Owner of car;
2) Any other authorized driver's of driver's car;
3) Any passengers in driver's car;
4) Any pedestrian hit by driver.
Who can NEVER claim no-fault?
1) Drunk drivers;
2) People engaged in drag racing;
3) Car thieves and fleeing felons.
What is the dividing line b/t big and small accidents?
Either of two circumstances:
1) First, basic economic loss - if you have only basic economic loss, it's a no-fault claim and if you have more than that, you go to court.
2) Serious injury - defined qualitatively.
What is basic economic loss?
$50,000 or less.
How is basic loss calculated?
By adding together:
1) Medical expenses +
2) 80% of lost earnings to a maximum of $2000/month +
3) Miscellaneous charge of $25/day.
If sum is less than $50,000, you have a no-fault claim; but if it's more than $50,000, you can file a negligence claim.
What does serious injury include?
1) Death;
2) Dismemberment;
3) Significant disfigurement;
4) Serious fracture;
5) Total and permanent loss of a bodily organ or function.
What do no-fault payments NOT include?
No-fault payments do NOT include any payments for paind and suffering.
Where does NY no fault insurance cover you?
It is portable - it follows you whereever you go. So, if you are a NY party and you have an accident out of state, you will have a claim.

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