What Happens When No-Fault Insurance Runs Out After a Car Accident in New York

When no-fault benefits run out, the next step is to confirm what was paid and identify other coverage before treatment bills become a surprise. Exhaustion does not, by itself, end a separate personal-injury claim.

It also does not guarantee that another insurer will pay. The policy, the kind of expense and the reason payments stopped all matter.

New York No-Fault Insurance: The Basics

Basic New York no-fault coverage generally provides up to $50,000 per eligible injured person for combined medical expenses, lost earnings and other necessary expenses.

DFS’s auto-insurance guide explains the limits: wage benefits are generally 80% of lost earnings, capped at $2,000 monthly for up to three years, with statutory offsets.

Other necessary expenses generally have a $25 daily limit for up to one year. These benefits share the basic limit; they are not separate $50,000 funds.

Coverage is not universal. Motorcycle occupants, for example, are excluded from basic no-fault benefits. The responsible insurer also depends on the injured person’s role and the vehicles involved.

What “No-Fault Exhaustion” Means

Exhaustion means that payments chargeable to an applicable coverage limit have used it up. A denial based on medical necessity, missing verification or a coverage exclusion is a different problem.

Ask for written confirmation of:

• The coverage and limit the insurer says are exhausted.
• The exhaustion date and payment ledger.
• Payments for medical care, wages and other expenses.
• Any additional coverage or remaining benefits.
• The reason each unpaid bill was denied.

Compare the ledger with the bills and explanations of benefits. Do not assume that an unpaid bill proves exhaustion, or that the insurer’s accounting cannot be questioned.

Where to look for additional coverage

Start with the declarations and endorsements for the occupied vehicle and potentially applicable household policies.

DFS’s no-fault FAQ identifies Additional PIP and, if that is unavailable, a claim to standard health insurance as possible next steps.

Optional Basic Economic Loss coverage, or OBEL, is different: Insurance Law § 5102(a)(5) describes an optional $25,000 allocation for specified losses after basic benefits are exhausted.

Ask what was purchased, who qualifies and which expenses it covers. Do not assume OBEL can pay every kind of medical bill.

If the crash happened during work, investigate workers’ compensation and no-fault coordination. Do not treat workers’ compensation as simply another fund to spend after PIP.

Keeping treatment and billing organized

Give your provider the written coverage decision and ask its billing staff what the next payer needs. Confirm network rules, authorization requirements and patient responsibility before relying on a change in coverage.

A provider’s agreement to defer collection is not health insurance. Ask what remains payable if a lawsuit produces no recovery, and have counsel review any proposed settlement-based payment agreement.

DFS’s opinion on fees after exhaustion explains that exhaustion does not itself free covered accident-related services from applicable no-fault fee-schedule limits.

Keep an itemized record of disputed and unpaid amounts. The medical-expenses guide sets out a practical tracking checklist.

Does exhaustion end the claim against another driver?

No. But coverage exhaustion and the right to recover damages answer different questions.

Insurance Law § 5104 restricts recovery of basic economic loss and generally requires serious injury for non-economic damages in covered-person auto cases.

Economic loss beyond the statutory basic-loss limits requires separate analysis. Spending $50,000 does not itself establish negligence, serious injury or the amount recoverable.

The applicable version of CPLR 1411, including its motor-vehicle fault restriction, can also affect recovery. Counsel must check applicability to the accident and claim.

Two decisions worth reading first

Exhaustion fights are usually won or lost on the carrier’s payment record. Two notes from the firm’s case archive show how that plays out: Easy Care (2016): the payment record behind a contested exhaustion defense, and Mendoza (2015): an IME cut-off that was never rebutted, where the physical-therapy claims failed for want of proof rather than for want of coverage.

What to bring to a coverage review

Bring the policy, claim number, accident date, exhaustion letter, payment ledger, unpaid bills and any health-plan denials. Include wage records and details of work-related travel where relevant.

A lawyer can then distinguish a billing dispute from a coverage dispute and assess the separate car-accident injury claim.

Do not wait for every benefits dispute to be resolved before checking filing deadlines. This guide provides general information, not a coverage decision or a promise of recovery.