Just Justice: When Car Insurance Becomes Health Insurance

“No Fault” insurance – what is it?

BY ALFRED LAUB, ESQ.

We have all either been involved in or know someone who was injured in a car accident. Generally speaking, the main concerns involve “how do I obtain treatment” and “who is going to pay for the doctor and hospital bills that will inevitably be received?”

The short answer is: your own car insurance company – New York has what is called a modified “no-fault” system. No fault coverage attaches to the liability insurance that covers motor vehicles throughout the state and applies to every person covered under that policy, as long as the policy is in effect.

Generally, your own insurance company provides a minimum of $25,000 in personal injury protection (PIP), although it can be increased, by paying an additional premium. Unfortunately, this system is frequently misunderstood.

In simple terms, it means insurance companies that provide automobile liability insurance simply pay for the medical treatment given to their insured customers and other family members, following an accident, as long as the company is promptly notified. This coverage often includes the cost of the ambulance, as well as most, if not all hospital treatment, X-Rays and MRI’s, follow-up treatment and physical therapy.

The insurance company does not make an initial determination as to who caused the crash. Before this system was put in place, insurance companies spent a substantial amount of time investigating who was at fault, and who should pay, while the actual people who were injured and needed medical assistance were unable to obtain treatment due to their inability to pay their medical bills.

Additionally, If necessary, your own auto insurance company could end up paying the bill for surgery or other medical care, as long as it was related to the collision and not something else.

Like many things in life, the theory behind this type of insurance is sometimes better than the practice which is followed in the marketplace. In part, this is because insurance is a business and insurance companies want to maximize their profits.

In some cases, the exception – that the company will only pay for injuries arising from the car accident – is used by insurance companies to avoid its duty to you, the customer. As a result, the slippery slope of no-fault insurance needs to be traversed very carefully.

The tactics used by insurers are many. They are designed to either disqualify or frustrate the policyholder, by claiming that the injuries are unrelated to the accident or that the injured person will not benefit from any further treatment.

At any point, the insurance companies can ask you to undergo what is known as an “independent medical exam.” While this type of examination is certainly permissible, practically speaking, there are a host of insurance company doctors, either retired or otherwise, limit their practices to performing examinations of this type.

Their conclusions invariably and regularly benefit the company by finding that the patient has achieved maximum improvement and will, therefore, not benefit from any further treatment.

It is important to note the difference between “no-fault” claims arising out of an automobile accident, and other claims the injured person may have, which arise from the very same accident. Making a claim for medical benefits under the no fault portion of the policy does not prevent the injured person from pursuing a separate claim against the other party who may be at fault.

This type of claim, if not resolved before being formally filed, results in a lawsuit of the type that is prosecuted on a daily basis throughout the courts of this state. Many times, the issues in the case are decided by a jury and may result in a separate award of money damages.

The importance of this third party claim should not be overlooked, since it allows a person who has been seriously injured by the negligence of others to seek more than just reimbursement for medical costs, as the costs of treatment are but one aspect of the total claim, especially when the injuries include a scar, disfigurement or disability.

By way of example, the other aspects of the claim may include pain and suffering, lost earnings and the loss of enjoyment of life generally, all of which are left in the hands of the jury to decide. I’ve learned over the years that people have varying opinions about the jury system and the benefits this system provides to our society as a whole.

Since lawyers do not have the ability to take people back one day before the fateful collision that change their lives, it seems that the only and best system is that which allows people the opportunity to have their claims judged by a jury of their peers.

If you have a law related question, please feel free to direct it to our law firm Laub Delaney LLP. Our email address is info@justice1.com. We will respond to Inquiries as they are received, with the qualification that an inquiry followed by a response does not create an attorney – client relationship.