When to Sue After Exceeding No-Fault Insurance Limits

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In New York, no-fault insurance helps simplify the process of compensation after a car accident. Each driver files a claim with their own insurance company to recover immediate expenses such as medical bills and lost wages.

But what happens when these costs exceed the $50,000 personal injury protection (PIP) limit? At that point, you may have the option to pursue a lawsuit against the at-fault party to recover additional damages.

What is no-fault insurance, and how does it work?

New York is a no-fault state, meaning drivers recover compensation from their own insurance policy, regardless of who caused the car accident. The primary goal of no-fault insurance is to streamline the claims process. It ensures quick payouts for medical expenses and lost wages without waiting for fault determinations. However, this system comes with limitations.

No-fault insurance only covers economic losses, including:

Medical expenses: Treatment, surgeries, and medication
Lost wages: Up to 80% of income, capped at $2,000 per month
Daily expenses: A maximum of $25 per day for household services

While no-fault insurance simplifies recovery for minor injuries, it excludes compensation for pain and suffering and restricts lawsuits unless the injuries meet specific legal thresholds.

When do no-fault insurance limits become a problem?

The PIP coverage limit in New York is $50,000 per person, but severe car accidents often exceed this amount. For example, these damages may exceed the limit:

Multiple surgeries or prolonged hospital stays
Physical therapy and rehabilitation extending over months
Lost wages beyond the capped coverage
Accidents involving multiple injured parties, sharing a single policy’s limit

When medical expenses alone surpass the $50,000 cap, victims may find themselves responsible for out-of-pocket costs. In these cases, pursuing compensation from the at-fault driver or another liable party may become necessary.

When can you sue under no-fault insurance rules?

Although no-fault insurance limits lawsuits for minor injuries, New York law permits victims to file a personal injury lawsuit if they meet the serious injury threshold. According to New York Insurance Law § 5102, a serious injury includes:

Bone fractures
Permanent disfigurement or significant scarring
Loss of use of a body part or organ
Temporary disabilities lasting 90 out of 180 days following the crash
Death or the loss of a fetus

If your injuries meet one of these criteria, you can step outside the no-fault system and pursue damages beyond what PIP covers.

Who can you sue for additional compensation?

When no-fault insurance fails to cover all your losses, you may pursue a lawsuit against various parties. Understanding who holds liability is key to a successful claim, and an attorney can help identify all responsible parties.

This includes:

The at-fault driver: Their liability insurance may cover medical expenses and other losses not addressed by your PIP policy.
Employers: If the at-fault driver was working at the time of the car accident, their employer could share liability.
Third parties: Manufacturers, maintenance companies, or local governments may face liability if a defective vehicle or unsafe road conditions contributed to your collision.

What types of damages can you recover in a lawsuit?

If your injuries allow you to file a lawsuit, you can recover more than just medical expenses. Additional types of compensation include:

Pain and suffering: Compensation for physical and emotional distress
Future medical expenses: Costs for ongoing treatment or future surgeries
Lost wages and earning capacity: Recovery of all lost income, including potential future earnings
Property damage: Repair or replacement costs for your vehicle

In cases of severe injury, these damages can easily amount to hundreds of thousands of dollars or more. Insurance settlements rarely reflect the full value of these losses. This makes it important to seek legal representation before accepting an offer. An attorney can determine the true value of your claim and ensure you get every dollar owed to you.

What steps should you take before filing a lawsuit?

Before filing a lawsuit, several steps will strengthen your case and improve your chances of securing fair compensation. Being thorough during these early stages increases your chances of a favorable outcome, whether through settlement or trial.

Here are the steps to take:

Collect evidence: Gather the police report, photos of the crash scene, and witness statements.
Document all expenses: Keep detailed records of medical bills, rehabilitation costs, and any lost wages.
Follow all medical advice: Attend all medical appointments and avoid activities that can worsen or disprove your injury.
Consult an attorney: An experienced New York attorney can assess whether your injuries meet the serious injury threshold and help you through the legal process.
Avoid speaking to the other driver’s insurance company: The other driver’s insurer may contact you for a recorded statement. Don’t give it to them without having an attorney present. Anything you say can potentially hurt your claim.

What are the legal deadlines for filing a lawsuit?

New York law imposes strict deadlines, known as statutes of limitations, on personal injury claims. If you miss these deadlines, you may lose your right to pursue compensation. Acting quickly ensures your case remains viable and helps preserve evidence to support your claim.

These statutes of limitations apply to:

Personal injury claims: Three years from the date of the car accident
Wrongful death lawsuits: Two years from the date of death
Property damage claims: Three years from the incident

What should I expect during the lawsuit process?

While lawsuits can take months or even years to resolve, they often result in much higher compensation than initial insurance offers. The process of filing a personal injury lawsuit involves multiple steps, including:

Filing a complaint: Your attorney files the lawsuit in court, and they detail your injuries and the damages sought.
Discovery phase: Both sides gather evidence, interview witnesses, and exchange relevant information.
Negotiations: Most personal injury cases settle before trial. Insurance companies may offer compensation to avoid courtroom battles.
Trial (if necessary): If no agreement is reached, the case proceeds to trial, where a judge or jury determines liability and damages.

Should I sue after exceeding your no-fault insurance limits?

When no-fault insurance benefits no longer cover the full extent of your losses, and your injuries meet the serious injury threshold, filing a lawsuit becomes a practical option. The damages can add up and the last thing you want is to pay out of your own pocket.

If you believe your case qualifies, don’t wait. Get help from an experienced car accident lawyer who serves New York City. The legal team at Giampa Law is ready to fight for the compensation you deserve.

With millions secured for accident victims across the Bronx and Westchester County, we bring proven results to every case. Our most notable case results include settlements of $1.5 million for pedestrian accidents and $750,000 for motor vehicle cases.

We operate on a contingency fee basis, meaning you pay nothing unless we win. Contact us online or call our Bronx law office today for a free, no-obligation consultation. Take the first step toward getting justice and fair compensation.

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