Increases certain monetary limits under the comprehensive motor vehicle insurance reparations (No-fault) act; includes additional non-medical expenses.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2261
SPONSOR: Septimo TITLE OF BILL:
An act to amend the insurance law, in relation to increasing certain
monetary limits under the comprehensive motor vehicle insurance repara-
tions act
PURPOSE:
This bill increases benefits caps in the Comprehensive Motor Vehicle
Insurance Reparations Act and improves their administration
SUMMARY OF PROVISIONS:
Section one of this bill amends subsection (a) of section 5102 of the
Insurance Law to increase the benefits caps for lost earnings and "other
reasonable and necessary expenses" in the no-fault system.
Section two of this bill amends subsection (b) of section 5102 of the
Insurance Law provides that the 20% reduction in lost earnings benefits
shall not apply towards the $50,000 limit for basic economic loss.
JUSTIFICATION:
The Comprehensive Motor Vehicle Insurance Reparations Act, as outlined
in Article 51 of the Insurance Law, establishes New York's "no-fault"
insurance system for motor vehicle crashes. The no-fault system was
established to lower the cost of auto insurance by taking small claims
out of the court system. Each insurance provider compensates its own
policyholder, regardless of who is at fault for the crash, and there are
certain restrictions on parties' ability to sue.
The benefits caps in the no-fault system, which are $2,000 a month for
lost earnings and $25 a day for other expenses, have not been increased
in 20 years and are frequently administered in an arbitrary manner. This
bill increases benefits by raising the cap to $3,000 a month and $50 a
day and clarifies that the category of "other reasonable and necessary
expenses" should include all expenses incurred due to the disability and
not simply transportation to and from medical appointments.
Finally, this bill clarifies that any credits or offsets to insurer
payment obligations with respect to crash victims' lost earnings, i.e.,
amounts deducted from benefits payable that are not amounts actually
paid, do not erode or exhaust the fifty thousand dollar limit for basic
economic loss per person. Currently, no-fault carriers are liable for
the first $50,000 of benefits, after which a victim's personal health
insurance may take over. The state automatically reduces non-fault bene-
fits paid to all claimants by 20%, however, as a way to treat post-crash
income, which is otherwise untaxed, in a manner similar to pre-crash
income which is taxed - so where a claimant is owed $2,000 in benefits,
for example, he or she may only get $1,600 after the 20% reduction. The
no-fault insurer can pretend that they have paid out all $2,000 for the
purposes of calculating total benefits before reaching the $50,000 cap,
despite only disbursing $1,600. Health insurers will then refuse cover-
age until a true $50,000 is paid out, however, leaving the victim of the
crash caught in a conflict between the two insurers. This bill clarifies
that the offset to no-fault benefits to account for the lack of tax
should not count towards amounts paid when calculating the $50,000 cap.
Taken together, these reforms will provide much-needed updates to New
York's no-fault benefits while ensuring a smoother transition for
severely injured victims of car crashes who exceed statutory benefits
limits and must resort to other insurance carriers.
LEGISLATIVE HISTORY:
2022 - A. 10297Referred to Insurance/ S. 6728 Referred to Insurancce
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
This act shall take effect immediately.
Section three sets the effective date.
JUSTIFICATION:
PRIOR LEGISLATIVE HISTORY:
2021-2022: A. 10297 - Referred to Insurance S. 6728/Gounardes - Referred
to Insurance
FISCAL IMPLICATIONS: TBD
EFFECTIVE DATE:
Immediate
STATE OF NEW YORK
________________________________________________________________________
2261
2023-2024 Regular Sessions
IN ASSEMBLY
January 25, 2023
___________
Introduced by M. of A. SEPTIMO -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the insurance law, in relation to increasing certain
monetary limits under the comprehensive motor vehicle insurance repa-
rations act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraphs 2 and 3 of subsection (a) of section 5102 of the
2 insurance law, paragraph 2 as amended by chapter 320 of the laws of
3 1991, are amended to read as follows:
4 (2) Loss of earnings from work which the person would have performed
5 had he not been injured, and reasonable and necessary expenses incurred
6 by such person in obtaining services in lieu of those that he would have
7 performed for income, up to [two] three thousand dollars per month for
8 not more than three years from the date of the accident causing the
9 injury. An employee who is entitled to receive monetary payments, pursu-
10 ant to statute or contract with the employer, or who receives voluntary
11 monetary benefits paid for by the employer, by reason of the employee's
12 inability to work because of personal injury arising out of the use or
13 operation of a motor vehicle, is not entitled to receive first party
14 benefits for "loss of earnings from work" to the extent that such mone-
15 tary payments or benefits from the employer do not result in the employ-
16 ee suffering a reduction in income or a reduction in the employee's
17 level of future benefits arising from a subsequent illness or injury.
18 (3) [All] Any and all other reasonable and necessary expenses incurred
19 including, without limitation, medical transportation, non-medical
20 transportation, pet care services, house cleaning services, laundry
21 services, and food preparation and delivery services, up to [twenty-
22 five] fifty dollars per day for not more than one year from the date of
23 the accident causing the injury. In determining whether an "other
24 expense" is reasonable and necessary, the certification of a treating
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01557-01-3
A. 2261 2
1 physician that the claimant was disabled from work during the relevant
2 period constitutes prima facie proof that the expense was reasonable and
3 necessary.
4 § 2. Subsection (b) of section 5102 of the insurance law is amended to
5 read as follows:
6 (b) "First party benefits" means payments to reimburse a person for
7 basic economic loss on account of personal injury arising out of the use
8 or operation of a motor vehicle, less:
9 (1) Twenty percent of lost earnings computed pursuant to paragraph two
10 of subsection (a) of this section, provided, however, that such twenty
11 percent shall not count towards the fifty thousand dollar limit for
12 basic economic loss per person described in subsection (a) of this
13 section.
14 (2) Amounts recovered or recoverable on account of such injury under
15 state or federal laws providing social security disability benefits, or
16 workers' compensation benefits, or disability benefits under article
17 nine of the workers' compensation law, or medicare benefits, other than
18 lifetime reserve days and provided further that the medicare benefits
19 utilized herein do not result in a reduction of such person's medicare
20 benefits for a subsequent illness or injury.
21 (3) Amounts deductible under the applicable insurance policy.
22 § 3. This act shall take effect immediately.
