Key Takeaway
Learn how insurers commit bad faith under NY's No-Fault Law and how to fight denied claims with legal strategies.
This article is part of our ongoing bad faith coverage, with 358 published articles analyzing bad faith 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.
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 intake@jtnylaw.com for a free case review.
Related Articles
- No-Fault Defense Legal Services
- What to Do When Your Insurance Claim Is Denied
- New York No-Fault Insurance Law
- Contact Our Office for Help
Additional Resources
- NY DFS Insurance Complaint Portal
- NY State Insurance Law Guidelines
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:
Legal Context
Why This Matters for Your Case
New York's no-fault insurance system, established under Insurance Law Article 51, is one of the most complex insurance frameworks in the country. Every motorist must carry Personal Injury Protection coverage that pays medical expenses and lost wages regardless of fault, up to $50,000 per person.
But insurers routinely deny valid claims using peer reviews, EUO scheduling tactics, fee schedule reductions, and coverage defenses. The Law Office of Jason Tenenbaum has handled over 100,000 no-fault cases since 2002 — from initial claim submissions through arbitration before the American Arbitration Association, trials in Civil Court and Supreme Court, and appeals to the Appellate Term and Appellate Division. Jason Tenenbaum is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
His 2,353+ published legal articles on no-fault practice are cited by attorneys throughout New York. Whether you are dealing with a medical necessity denial, an EUO no-show defense, a fee schedule dispute, or a coverage question, this article provides the kind of detailed case-law analysis that helps practitioners and claimants understand exactly where the law stands.
Keep Reading
More Bad Faith Analysis
Priority of Payment Regulation Has No Force in Arbitration: First and Second Departments Agree
Both the First and Second Departments have held that the priority of payment regulation under 11 NYCRR 65-3.15 is of no force or effect in no-fault arbitration proceedings....
Feb 25, 2026
$5 Million Verdict Affirmed for Childhood Sexual Abuse Survivor Under NY Survivors Act
NY appellate court affirms $5M verdict for childhood sexual abuse survivor under the Survivors Act. Learn your rights. Call 516-750-0595 for a free consultation.
Feb 18, 2026
The New York experience at the Appellate Courts from a PIP perspective: My end of year observations.
New York appellate court observations from a PIP attorney's perspective on rising appeal costs, electronic filing needs, and procedural challenges in 2021.
Dec 18, 2021
First Department applying a stringent default vacatur standard
First Department applies stringent default vacatur standard in Tri-State v Hereford, requiring reasonable excuse and meritorious defense despite public policy favoring merits.
Dec 18, 2018
Case remanded to Civil Court to determine whether interest was tolled
Court remands no-fault case to determine interest calculations, highlighting complexities in Insurance Law § 5106(a) tolling provisions for overdue medical benefits.
Sep 13, 2011
Ozempic Lawsuits
Learn about Ozempic lawsuit claims, side effects, and legal options. Get help with your Ozempic injury case from experienced attorneys.
Mar 3, 2025Common Questions
Frequently Asked Questions
What constitutes insurance bad faith in New York?
Bad faith occurs when an insurer unreasonably delays, denies, or underpays a valid claim without a legitimate basis. In New York, bad faith in the no-fault context can include failing to timely pay or deny claims, conducting sham IMEs, or using delay tactics to avoid payment. While New York does not have a standalone bad faith statute for first-party claims, remedies include consequential damages and interest.
What remedies are available for insurer bad faith?
In no-fault cases, remedies include 2% per month statutory interest on overdue claims under 11 NYCRR §65-3.9, attorney fees, and potentially consequential damages. In liability insurance contexts, insurers acting in bad faith may be liable for the full judgment against the insured, even exceeding policy limits.
How do I prove bad faith by my insurance company?
You must show the insurer had no reasonable basis for denying or delaying your claim. Evidence includes the insurer's claims file, the timing and adequacy of their investigation, whether they followed their own procedures, and whether the denial was supported by the medical evidence. A pattern of similar conduct toward other claimants can also be relevant.
What is New York's no-fault insurance system?
New York's no-fault insurance system, codified in Insurance Law Article 51, requires all drivers to carry Personal Injury Protection (PIP) coverage. This pays for medical expenses, lost wages (up to $2,000/month), and other basic economic loss regardless of who caused the accident, up to $50,000 per person. However, to sue for pain and suffering, you must meet the 'serious injury' threshold under Insurance Law §5102(d).
How do I fight a no-fault insurance claim denial?
When a no-fault claim is denied, you can challenge it through mandatory arbitration under the American Arbitration Association's no-fault rules, or by filing a lawsuit in court. Common defenses to denials include challenging the timeliness of the denial, the adequacy of the peer review report, or the insurer's compliance with regulatory requirements. An experienced no-fault attorney can evaluate which strategy gives you the best chance of overturning the denial.
Was this article helpful?
About the Author
Jason Tenenbaum, Esq.
Jason Tenenbaum is the founding attorney of the Law Office of Jason Tenenbaum, P.C., headquartered at 326 Walt Whitman Road, Suite C, Huntington Station, New York 11746. With over 24 years of experience since founding the firm in 2002, Jason has written more than 1,000 appeals, handled over 100,000 no-fault insurance cases, and recovered over $100 million for clients across Long Island, Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, the Bronx, and Staten Island. He is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
Jason is admitted to practice in New York, New Jersey, Florida, Texas, Georgia, and Michigan state courts, as well as multiple federal courts. His 2,353+ published legal articles analyzing New York case law, procedural developments, and litigation strategy make him one of the most prolific legal commentators in the state. He earned his Juris Doctor from Syracuse University College of Law.
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 bad faith 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.
