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Protections and pitfalls of New York's no-fault insurance

When you are involved in an accident, insurance considerations are some of the first thoughts that might come to your mind after you seek the medical care you need. New York uses a no-fault insurance system. That means that you would turn to your own insurance company for benefits after a car accident. It also restricts your right to sue if you are injured in a car accident.

There are two types of no-fault insurance systems -- those that use an amount threshold and those that use a verbal threshold. New York is one of the five states that use the verbal threshold. This means that specific wording, or a description, is used to determine when a person can sue for compensation after an accident.

In the no-fault system, filing a lawsuit for pain and suffering and injuries is only possible if the injuries are severe. The injuries you suffer must meet certain criteria for you to be eligible to sue.

The issue with the verbal threshold for lawsuits is that the wording has become eroded over time. This has led to some doctors and medical professionals overbilling or padding billing just to push up costs associated with a claim. New York has fought back against that by instituting several steps to prevent fraud. Unannounced inspections, increased criminal penalties and a system of checks and balances are some of the steps that Gov. Andrew Cuomo announced in his 2014-15 Executive Budget.

The bottom line is that if you are seriously injured in an accident, you should work to discover if your case is eligible for a lawsuit. Getting answers to your questions and learning about how the no-fault laws affect your case can help you decide what to do.

Source: Insurance Information Institute, "No-Fault Auto Insurance," accessed Aug. 26, 2015

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