Key Takeaway
New York no-fault insurance law on statutory interest tolling when providers delay prosecution of claims against insurers.
This article is part of our ongoing interest coverage, with 12 published articles analyzing interest issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
Kew Gardens Med & Rehab, P.C. v Country-Wide Ins. Co., 2016 NY Slip Op 51240(U)(App. Term 2d Dept. 2016)
(1) “On appeal from the judgment, defendant limits its arguments to the award of statutory interest, contending that, due to plaintiff’s inaction, it should not have been awarded statutory interest or, in the alternative, that statutory interest should not begin to accrue until August 30, 2013, when plaintiff served a motion to compel discovery.”
(2) “Where a provider does not commence a no-fault action within 30 days of receipt of the insurer’s denial of claim form, the Insurance Department Regulations provide that statutory prejudgment interest (see Insurance Law § 5106 ) does not begin to accumulate until an action is commenced (11 NYCRR 65—3.9 ). If an action has been commenced, statutory interest accumulates “unless the applicant unreasonably delays the … court proceeding” (11 NYCRR 65—3.9 ). In this case, plaintiff took no meaningful action to prosecute the case until it served a motion to compel discovery on August 30, 2013. Plaintiff should not be rewarded for its years of inaction by receiving a windfall of interest”
(3) “Accordingly, the judgment, insofar as appealed from, is modified by deleting the provisions thereof computing statutory interest from April 30, 2002 and awarding interest in the sum of $15,457.93, and by providing that interest be computed from August 30, 2013.”
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The argument that Plaintiff makes in this situation is that defendant never complied with discovery demands and should not be penalized through the loss of interest due to defendant’s neglectful behavior. The corollary is wake up and do something. The corollary always wins.
Consider the following situations:
(1) A decision is rendered, judgment is not entered, 10 years goes by and now the amount is owed is well beyond what anyone thought.
(2) A decision is rendered, judgment is entered (never served upon defendant with NOE), 10 years goes by and now the amount is owed is well beyond what anyone thought.
My feeling is that in this situation, a defendant who does not attempt to pay what is owed will be left holding the bag for 2% interest (compounded on the older cases) until the amount due and owing (whether or not reduced to a judgment) is paid.
Related Articles
- Understanding the radar case on PIP interest tolling
- New York’s 2% interest rule clarification from DOI
- How defaults affect interest accumulation
- When interest was not tolled in no-fault cases
- Windfall interest scenarios
Legal Update (February 2026): Since this 2016 post was published, the regulatory provisions governing statutory interest calculation under Insurance Law § 5106 and related provisions in 11 NYCRR 65-3.9 may have been amended or modified. Practitioners should verify current regulatory language regarding interest tolling periods, commencement deadlines, and the specific circumstances under which statutory prejudgment interest begins to accumulate in no-fault cases.
Legal Context
Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
About This Topic
Statutory Interest on No-Fault Insurance Claims
Under New York's no-fault regulations, insurers that fail to timely pay or deny a claim are subject to statutory interest penalties — currently two percent per month under 11 NYCRR 65-3.9. The accrual of interest, the calculation methodology, and the circumstances that toll or trigger interest obligations are frequently litigated issues in no-fault practice. These articles examine the regulatory framework governing interest on overdue no-fault claims and the case law that shapes how interest awards are calculated and enforced.
12 published articles in interest
Keep Reading
More interest Analysis
Interest Through Payment: 2% Monthly No-Fault Interest Keeps Running After Judgment
B.Z. Chiropractic v Allstate: Queens Supreme Court holds no-fault interest keeps running at 2% per month after judgment, rejecting the 9% CPLR rate.
Mar 11, 2019
Post judgment interest at 9%?
New York court clarifies post-judgment interest calculation at 9% per year in no-fault insurance cases, distinguishing between statutory rates and payment procedures.
Dec 18, 2018
Interest was not tolled
New York appeals court rules that no-fault statutory prejudgment interest continues to accrue during litigation delays unless the plaintiff unreasonably caused the delay.
Feb 8, 2018
Giant Oops from the Appellate Term
Appellate Term grants clarification motion on 9% interest rate in no-fault case despite CPLR 5004 allowing different rates when other statutes apply.
Dec 27, 2017
Stipulating to Liability Does Not Start Prejudgment Interest: Mahoney v Brockbank and CPLR 5002
Mahoney v Brockbank holds a liability stipulation does not trigger prejudgment interest under CPLR 5002 — a drafting trap that can cost plaintiffs dearly.
Sep 16, 2016
This one fell under the radar
Expert analysis of NY PIP interest tolling under 65-3.9(d). Learn how procedural delays can cost thousands in Long Island & NYC cases. Call 516-750-0595.
Jan 17, 2012Was this article helpful?
Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
If you need legal help with a interest matter, contact our office at (516) 750-0595 for a free consultation. We serve clients throughout Long Island (Huntington, Babylon, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton), Nassau County (Hempstead, Garden City, Mineola, Great Neck, Manhasset, Freeport, Long Beach, Rockville Centre, Valley Stream, Westbury, Hicksville, Massapequa), Suffolk County (Hauppauge, Deer Park, Bay Shore, Central Islip, Patchogue, Brentwood), Queens, Brooklyn, Manhattan, the Bronx, Staten Island, and Westchester County. Prior results do not guarantee a similar outcome.
