How Does Personal Injury Protection (PIP) Car Insurance Work in New York?

In New York, drivers are mandated to carry Personal Injury Protection per the state's "No-Fault" law. PIP is a form of health insurance purchased as part of an auto insurance policy. It covers the costs of all injuries drivers and passengers personally sustain, regardless of who was at-fault in the accident. As with other states that require PIP, the Empire State has its own special laws and regulations. 

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What is Covered by Personal Injury Protection in New York? 

New Yorkers have essentially three things covered by PIP: medical costs, economic losses and death benefits. The minimum amount of PIP you can get is $50,000 (which is also the maximum amount you are entitled to recover with a PIP claim). You can purchase additional PIP if you'd like, which is especially worthwhile if you have a high salary. If you receive any benefits from Workers' Compensation, Social Security Disability, New York State Disability, and certain employer "wage continuation" plans, your PIP benefits will be reduced by whatever amount you receive from those places. The insured driver, his passengers and members of his household are entitled to PIP benefits. PIP will also cover injuries sustained in an accident if you're a pedestrian struck by an MTA or other bus. 

What Medical Costs Does PIP Cover in New York?

Most medical costs stemming from a car accident will be covered by your personal injury protection. The covered expenses include:

  • Medical services
  • Dental services
  • Hospital expenses
  • Surgical services
  • Psychiatric and physical rehabilitative costs
  • Diagnostic services like X-rays
  • Ambulatory services 
  • Treatment in accordance with a recognized religion

Economic Losses Covered by New York PIP

If you are unable to work because of your injuries, PIP in the Empire State will also pay for any lost wages up to $2,000 per month or 80% of your monthly earnings, whatever is less, for no more than three years after the accident, and up to the $50,000 limits of a basic policy. The $2,000 is a hard cap, meaning if you were ordinarily making $6,000 per month, you will only get $2,000. Conversely, if you were making $1,500 a month, then you will only get 80% of that, meaning $1,200 per month. You will also be entitled to $25 per day to take care of routine activities that you can no longer do. Chores such as doing the laundry, maintaining your house or even shoveling snow will all be covered by that $25 per day. You may increase the $50,000 limit to $75,000 by purchasing Optional Basic Economic Loss insurance (OBEL). You may increase it even further by purchasing additional PIP.

Death Benefits 

If an eligible insured driver is killed in an accident, the estate of the driver is entitled to $2,000 to help pay for funeral and burial costs. This benefit is seen in most other states' PIP laws as well. 

When and How to File a Personal Injury Protection Claim in New York 

Knowing how to properly file a claim and when to submit it is pivotal in ensuring a smooth repayment of your costs. For medical costs, you will have 45 days after the start of treatment to submit written proof to your insurance company that details the nature and extent of the injuries and treatment received. New York policies allow you 90 days to submit written proof on your loss earnings. It is best to do these as fast as possible, since your company is not required to pay out until they receive your forms. Once they do receive them however, they will have 30 days to pay you. Your company may ask for you to submit more proof or more details, usually to ensure the claim is not fraudulent. 

How Much Does Personal Injury Protection Cost in New York?

The Empire State does not give consumers many ways to reduce costs like in other states. You may select a $200 deductible which will lower premiums slightly, but you cannot coordinate the coverage with your health insurance as in the case of New Jersey and Michigan. If you feel the $50,000 won't be enough coverage, you can also buy Optional Basic Economic Loss (OBEL) as well as additional PIP that will increase your limits. Below are a few sample car insurance quotes for a two types of drivers: 

DriverDeductible OptionPIP/Full Policy Price
30 year old single male No deductible $112/$1,078
$200 deductible $109/$1,074
45 year old married couple No deductible $140/$1,212
$200 deductible $137/$1,209
Optional Basic Economic Loss $12
Additional $50,000 PIP $16

The $200 deductible ultimately does not do much to reduce costs. The average difference between opting in and opting out of the deductible was only $3.50. It may just be better to go without the deductible depending on your budget. If you have to use your PIP, the deductible will not have saved you enough money to justify the $200 out of pocket expense. OBEL and additional PIP are relatively cheap, costing less than an extra $30 per year for an extra $75,000 worth of coverage. We discuss whether those extra coverages are worth it in the next section. 

Should You Get Optional Basic Economic Loss (OBEL) and/or Additional PIP Benefits?

New York already offers one of the higher minimum PIP limits in the country, so you may question whether you need extra coverage. Medical expenses from a car accident can become expensive, so it may be easy to overtake your limits. However, if you have good health insurance, you should be able to pay for the rest of your expenses through that. OBEL is particularly helpful however when it comes to getting more earnings loss benefits. OBEL gives you an additional $25,000 worth of benefits that you can allocate toward medical expenses, earnings losses, psychiatric or rehabilitative costs, or a combination of the last two.

OBEL may be useful when you remember earnings loss benefits are subject to a maximum of $50,000 (or about two years worth of benefits since you get $2,000 per month). Two years is a long time to be disabled, thus it may be unlikely for you to need that much earnings loss coverage. On the other hand however, if your injuries end up costing $40,000, that leaves you only $10,000 left of your PIP. The $10,000 will cover 5 months of earnings losses. A particularly severe injury may keep you out longer than 5 months. Considering the cost of OBEL is less than $15 per year, it may be worth to have on your policy, just in case. If you have good health insurance, buying even more PIP may be superfluous.

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