It is a two way street

When multiple insurance policies could potentially cover the same accident, determining which carrier has primary responsibility becomes a complex legal battleground. For accident victims across Long Island and New York City, understanding priority of coverage rules can mean the difference between comprehensive medical benefits and limited coverage options.

The Two-Way Street of Insurance Priority Coverage

In the world of no-fault insurance law, what benefits medical providers and insurance carriers in one situation can create unexpected challenges in another. This principle of reciprocal consequences—or the “two-way street”—has significant implications for how coverage priority disputes are handled and resolved.

The Westchester Medical Center Decision: Expanding Implications

In reading the Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 2009 NY Slip Op 02589 (2d Dept. 2009) case that involved the validity of a denial based upon workers compensation primacy, it appeared (at first blush) that the providers obtained a true victory against the carriers. Whereas compensation is somewhat consistent with managed health care, no-fault is the exact opposite. Furthermore, the scope of medical services compensated under no-fault is far greater than the services reimbursed under Workers Compensation. One only needs to ask a certain bunch of attorneys who are fighting this exact issue in the context of whether a Licensed Massage Therapist may receive compensation under no-fault for rendered services inasmuch as the same services are not compensable under Workers Compensation. This same battle arises in the realm of acupuncture that an L.AC performs and services a chiropractor renders outside the chiropractor fee schedule.

But, does this also mean that “priority of coverage” issues may also be subject to the 30-day pay or deny rule? Let me rephrase this statement. Does this mean that a primacy of coverage defense may be adjudicated in court or arbitration against a Claimant, because another insurance carrier might be primary?

Here are two examples. 1) John Doe, a Geico insured, is involved in a motor vehicle accident while occupying an Elrac rental vehicle in New York. Or, 2) John Doe, while in a Elrac vehicle is in an accident in Montana.

Under scenerio “1”, Elrac is primary. Under scerio “2”, Geico is primary. Simply put, the rule in New york is that coverage follows the vehicle, except that when the accident occurs outside NEw York, it follows the person.

Medical provider submits bills to Geico under scenerio #1 and Elrac in scenerio #2. Both of the carriers the bills were submitted to are not the first in line under a priority of payment analysis. Geico in example #1 and Elrac in example #2 timely denies the bills. Now what?

Under conventional wisdom, issues involving primacy of payment must be adjudicated in 5105 mandatory arbitration. See, 65-3.12; SZ Medical, P.C. v. Lancer Ins. Co., 7 Misc.3d 8 (App. Term 2d Dept. 2005). In other words, the secondary carrier must adjust the claim in the normal and ordinary course of business and then seek reimbursement against the primary carrier through intercompany arbitration. The SOL would be three years from the payment, so it cannot be said that the carrier should be too unhappy with this result. Motor Vehicle Acc. Indemnification Corp. v. Aetna Cas. & Sur. Co. 89 N.Y.2d 214 (1997).

Under the current system, money from the secondary insurer would have to be paid out on the front end, but may be recovered on the back end.

Now, because of the Westchester Case, it appears that priority of payment issues may be raised and defended at any time through a timely denial. Thus, next time I receive a denial when there is a primary of payment issue, maybe I actually have a defense? So, you can say this is the other side of the two-way street…

Be careful what you wish for.

Understanding Priority of Coverage Rules in New York

For Long Island and NYC area accident victims, understanding how New York’s priority of coverage rules work is essential to maximizing available benefits and avoiding coverage gaps. These rules determine which insurance company must pay first when multiple policies potentially apply to the same accident.

The Basic Rule: Coverage Follows the Vehicle

In most New York motor vehicle accidents, the primary rule is straightforward: coverage follows the vehicle. This means that if you’re injured while occupying a vehicle, that vehicle’s no-fault insurance policy typically provides primary coverage, regardless of whether you have your own auto insurance policy.

This rule has practical implications for Long Island residents who frequently:

• Use rental vehicles for business or personal travel
• Ride as passengers in friends’ or family members’ vehicles
• Take rideshare services like Uber or Lyft
• Use company vehicles for work-related activities

The Exception: Out-of-State Accidents

However, New York’s priority rules change significantly when an accident occurs outside New York State. In these situations, coverage follows the person rather than the vehicle. This creates a fundamental shift in which insurance policy provides primary coverage.

For Long Island residents who frequently travel to:

• New Jersey for work or leisure
• Connecticut for shopping or family visits
• Pennsylvania or other states for vacation
• Any out-of-state location for business

The coverage priority rules may completely reverse, making your personal auto insurance policy primary instead of the vehicle owner’s policy.

Real-World Examples of Coverage Priority Issues

The scenarios outlined in the original analysis demonstrate how complex these priority determinations can become:

Scenario 1: Rental Vehicle Accident in New York

When a Geico-insured person is injured while occupying an Enterprise rental vehicle in New York, Enterprise’s no-fault coverage is primary. This means:

• Enterprise’s insurer must process and pay no-fault claims first
• Geico’s coverage is secondary and may only apply if Enterprise’s coverage is insufficient
• Medical providers should submit bills to Enterprise’s carrier initially
• Any priority disputes would typically be resolved through intercompany arbitration

Scenario 2: Rental Vehicle Accident Outside New York

When the same Geico-insured person is injured while in an Enterprise vehicle during an accident in Montana, the priority reverses:

• Geico’s coverage becomes primary because coverage follows the person in out-of-state accidents
• Enterprise’s coverage becomes secondary
• Medical providers should submit bills to Geico first
• The out-of-state accident location creates the coverage flip

The Shifting Landscape: Timing Requirements and Coverage Defenses

The Westchester Medical Center decision has potentially created new dynamics in how priority of coverage disputes are handled. Traditionally, these disputes were resolved through mandatory arbitration after the secondary carrier paid benefits and then sought reimbursement from the primary carrier.

Traditional Arbitration Process

Under the established system:

• The secondary carrier would pay benefits promptly to the injured party
• The carrier would then initiate intercompany arbitration to recover from the primary carrier
• The three-year statute of limitations provided ample time for recovery
• Injured parties received benefits without delay while carriers sorted out priority internally

The New “Timely Denial” Defense

Following the Westchester decision, it appears that carriers may now raise priority of payment issues through timely denials rather than being required to pay first and recover later. This creates both opportunities and risks:

Potential Benefits:

• Clearer priority determinations upfront
• Reduced intercompany arbitration costs
• More efficient claim processing when priority is clear

Potential Risks:

• Delays in benefit payments while priority is determined
• Increased litigation over coverage priority
• More complex claim handling procedures
• Potential for injured parties to fall through coverage gaps

Practical Guidance for Accident Victims

Given these evolving priority of coverage rules, Long Island accident victims should take proactive steps to protect their interests:

Immediate Post-Accident Actions

1. Report to All Potentially Applicable Insurers
Don’t assume which carrier is primary. Report the accident to all insurance companies that might have coverage, including:

• Your personal auto insurance carrier
• The vehicle owner’s insurance carrier
• Any employer-provided coverage if the accident was work-related
• Rental car company insurance if applicable

2. Document the Accident Location
Since priority rules differ for in-state versus out-of-state accidents, carefully document where the accident occurred. This information can be crucial for determining coverage priority.

3. Preserve All Insurance Information
Collect insurance information for all vehicles involved in the accident, even if you believe another carrier is primary. Priority determinations can be complex and may require analysis by insurance law specialists.

When Claims Are Denied Based on Priority

If you receive a denial based on priority of coverage arguments:

• Don’t accept the denial at face value
• Analyze whether the carrier’s priority determination is correct under New York law
• Consider whether the denial meets timing and specificity requirements
• Evaluate whether mandatory arbitration might be required

Coverage Scope Differences: Workers’ Compensation vs. No-Fault

The original analysis touches on a critical issue for many Long Island workers: the significant differences in coverage scope between workers’ compensation and no-fault insurance benefits.

Treatment Options: No-Fault vs. Workers’ Compensation

No-fault insurance typically provides broader treatment options compared to workers’ compensation:

Services Often Covered by No-Fault But Not Workers’ Compensation:

• Licensed massage therapy from non-medical practitioners
• Acupuncture services from licensed acupuncturists (L.AC)
• Chiropractic services outside the limited workers’ compensation fee schedule
• A broader range of diagnostic testing and imaging
• More liberal authorization policies for ongoing treatment

This difference in coverage scope means that priority determinations can directly impact the quality and extent of medical care available to injured parties.

Frequently Asked Questions

Q: If I’m injured in a rental car accident in New York, which insurance pays my medical bills?
A: Generally, the rental car’s no-fault insurance is primary in New York accidents, as coverage follows the vehicle. Your personal insurance would be secondary.

Q: What happens if I’m in an accident with a rental car while traveling out-of-state?
A: For out-of-state accidents, coverage typically follows the person rather than the vehicle. Your personal auto insurance would likely be primary, with the rental car coverage being secondary.

Q: Can insurance companies now deny claims upfront based on priority issues?
A: The Westchester Medical Center decision suggests that carriers may be able to raise priority defenses through timely denials rather than paying first and seeking reimbursement later through arbitration.

Q: What should I do if multiple insurance companies deny my claim, each saying the other is primary?
A: This situation requires immediate legal attention. Both carriers may be trying to avoid responsibility. You may need to initiate legal action to force proper coverage determination.

Q: How long do insurance companies have to resolve priority disputes?
A: Traditional intercompany arbitration allowed carriers to seek reimbursement for up to three years after payment. The new timing requirements may create different deadlines for priority determinations.

Long-Term Implications for the Insurance Industry

The evolving interpretation of priority of coverage rules represents a significant shift in New York insurance law. This change affects multiple stakeholders:

Impact on Insurance Companies

• More complex claim handling procedures
• Increased need for immediate priority determinations
• Potential reduction in intercompany arbitration costs
• Greater emphasis on timing in denial letters

Impact on Healthcare Providers

• More uncertainty about which carrier to bill initially
• Potential delays in reimbursement during priority disputes
• Need for more sophisticated billing and collection procedures
• Increased importance of provider network contracts with multiple carriers

Impact on Injured Parties

• Potential for faster priority resolutions when rules are clear
• Risk of payment delays during disputed priority determinations
• Increased importance of having comprehensive legal representation
• Greater need to understand coverage priority rules

Navigating Complex Priority of Coverage Issues

As the law continues to evolve, injured accident victims need experienced legal representation to navigate the increasingly complex world of insurance priority disputes. An experienced personal injury attorney can:

• Analyze the specific facts to determine proper coverage priority
• Challenge improper denials based on priority arguments
• Ensure that timing requirements are met for all claims
• Coordinate claims with multiple insurance carriers
• Initiate arbitration or litigation when necessary to resolve disputes
• Protect your rights during the claims process

The “two-way street” of insurance law means that decisions benefiting one group in one situation may create challenges in another context. Understanding these dynamics and having proper legal representation can make the difference between receiving full compensation and falling through coverage gaps.

If you’ve been injured in a motor vehicle accident involving complex priority of coverage issues, call 516-750-0595 for experienced legal representation from a Long Island personal injury attorney who understands New York’s evolving insurance laws.

Related Articles

• Workers compensation defense strategies in no-fault cases
• Standing vs. exclusion analysis in workers compensation defense
• Why Malella defenses survive untimely disclaimers while workers compensation defenses don’t
• Timing requirements for workers compensation denials
• Strategic considerations when appealing workers compensation rulings

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Legal Update (February 2026): Since this 2009 post was published, New York’s no-fault fee schedules and reimbursement rates have undergone multiple revisions, and workers’ compensation coverage parameters may have been modified through regulatory amendments. Additionally, case law interpreting priority of coverage rules and the scope of compensable medical services under both no-fault and workers’ compensation systems has continued to evolve. Practitioners should verify current fee schedule provisions, coverage priority regulations, and recent appellate decisions when advising on multi-policy coverage scenarios.