Imagine dealing with medical bills piling up after a car accident, only to have your insurance company reject your claim. This frustrating situation happens far too often. Many policyholders face delays or outright denials when seeking coverage, leaving them financially strained. Understanding bad faith litigation practices and your rights under New York’s No-Fault Law can make all the difference.
This post breaks down how bad faith works within New York’s insurance system. We’ll clarify what qualifies as bad faith, highlight common insurer tactics, and explain legal options for holding companies accountable. You’ll also learn how personal injury lawyers The Law Office of Jason Tenenbaum, P.C. effectively handles these cases.
Here’s what we’ll cover:
- How New York’s No-Fault system operates
- Clear examples of bad faith behavior
- Legal strategies to challenge unfair denials
- Real-world examples of bad faith cases
- Practical steps to protect your rights
How NY’s No-Fault System Works – And When Insurers Cross the Line
New York’s No-Fault Law (Personal Injury Protection, or PIP) aims to provide quick reimbursement for accident-related medical bills and lost wages, regardless of fault. The system was designed to reduce lawsuits and speed up payments. But when insurers drag their feet, deny valid claims without reason, or mislead policyholders, they violate the law’s intent.
Bad faith occurs when an insurer ignores its obligation to handle claims fairly. This could mean delaying payments for months, refusing to explain denial reasons, or manipulating policy language to avoid payouts. Recognizing these tactics empowers you to take action.
Basics of NY’s No-Fault Insurance
History and Goals
New York introduced No-Fault insurance to simplify compensation after car accidents. Before this system, injured parties often endured lengthy court battles to recover costs. The No-Fault Law shifted this by requiring insurers to cover basic expenses like medical care and lost income upfront, without assigning blame.
What’s Covered – And What’s Not
Every registered vehicle in New York must carry No-Fault insurance. Coverage includes:
- Medical treatments (surgeries, physical therapy, etc.)
- Up to 80% of lost wages if injuries prevent work
- Essential expenses like transportation to medical visits
However, No-Fault doesn’t cover non-economic damages like pain and suffering unless injuries meet strict “serious injury” criteria defined by law.
The Claims Process
After an accident, you must submit a No-Fault application to your insurer within 30 days, including medical reports and proof of lost income. Insurers have 30 days to approve or deny the claim. Delays beyond this window or vague denial letters often signal bad faith.
What Defines Bad Faith in Insurance?
Bad faith isn’t just a mistake or disagreement—it’s a pattern of unreasonable actions. Examples include:
- Repeatedly “losing” paperwork to delay processing
- Denying claims without citing specific policy exclusions
- Failing to respond to inquiries for weeks
- Misrepresenting policy terms to confuse policyholders
A breach of contract happens when an insurer doesn’t pay a valid claim. Bad faith goes further, showing the company intentionally disregarded your rights.
Red Flags to Watch For
- Requests for redundant documentation (e.g., asking for the same medical records multiple times)
- Overly technical denial letters filled with legal jargon
- Refusing to clarify coverage details
Common Bad Faith Tactics in No-Fault Cases
Stalling Tactics
Insurers might “forget” to process your claim, hoping you’ll drop it or accept a lowball offer. For example, delaying payment for essential surgery forces some policyholders to take on debt.
Bogus Denials
Some companies deny claims using vague excuses like “treatment not medically necessary” without providing evidence. Others misinterpret policy terms—for instance, rejecting chiropractic care by falsely claiming it’s excluded.
Ghosting Policyholders
Ignoring calls, emails, or letters violates insurers’ duty to communicate. If your adjuster goes silent for weeks, it’s a warning sign.
Legal Options for Fighting Bad Faith
While New York lacks a specific bad faith law for No-Fault cases, policyholders can sue for breach of contract and violation of the implied “good faith” obligation. Remedies include:
- Payment of owed benefits
- Compensation for additional costs caused by delays (e.g., late fees, credit damage)
- Punitive damages in extreme cases
The New York Department of Financial Services (DFS) also penalizes insurers for unethical practices. Filing a DFS complaint can trigger investigations and fines against the company.
Case Examples: How Bad Faith Plays Out
The Case of the Unjustified EUO
In a 2025 dispute, an insurer repeatedly rescheduled a policyholder’s Examination Under Oath (EUO), then denied the claim for “non-cooperation.” Courts later ruled the insurer acted unreasonably, as the delays were intentional.
Lowball Settlement Tactics
An accident victim requiring spinal surgery was offered $5,000 despite $50,000 in documented bills. The insurer claimed the procedure was “experimental,” though medical experts confirmed its necessity. The court ordered full payment plus penalties.
These cases show how insurers exploit loopholes—and why detailed evidence is critical.
How The Law Office of Jason Tenenbaum, P.C. Can Help
With over 500 No-Fault cases handled, our firm understands insurer tactics inside out. We focus on:
- Uncovering Patterns: Tracking an insurer’s history of delayed payments or repeated denials
- Medical Necessity Battles: Working with doctors to counter claims that treatments weren’t needed
- Appeals & Litigation: Taking cases to court when insurers refuse fair settlements
Jason Tenenbaum has shaped key legal precedents, including securing attorneys’ fees for clients forced to arbitrate denied claims.
Steps to Take If You Suspect Bad Faith
- Document Every Interaction: Save emails, letters, and call logs. Note dates, times, and the names of representatives you speak with.
- Request a Detailed Denial Explanation: Insurers must cite specific policy sections when denying claims. Generic rejections like “not covered” are invalid.
- Consult a Lawyer Early: Don’t wait until bills pile up. Attorneys can send demand letters, file DFS complaints, or sue if needed.
Final Thoughts: Standing Up to Insurers
New York’s No-Fault system works—when insurers follow the rules. If your claim faces unexplained delays or denials, legal help can turn the tide. The Law Office of Jason Tenenbaum, P.C. combines deep knowledge of No-Fault law with a track record of holding companies accountable.
Need Assistance?
Contact us at 516-750-0595 or [email protected] for a free case review.
Additional Resources
Disclaimer: This article provides general information, not legal advice. Consult an attorney about your specific situation.
For more information on NY bad faith litigation, check out the video below:
