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IIABNY Urges Defeat of Bill That Would Weaken No-Fault Insurance System

Source: IIABNY

Posted on 18 Jun 2010

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Legislation pending before the New York State Legislature will create bottlenecks in the court system and raise auto insurance premiums, the Independent Insurance Agents & Brokers of New York warned today. The not-for-profit insurance producers' trade association called on lawmakers to defeat the measure, Assembly bill A10739 and Senate bill S7518.

The bills, introduced by Assemblyman Matthew Titone (D-Staten Island) and Sen. Antoine M. Thompson (D-parts of Erie and Niagara Counties), would weaken New York’s no fault insurance system by expanding the types of injuries for which a person hurt in an auto accident could sue the person responsible. They would also require juries to decide questions over whether the injured person has a legal right to sue, rather than judges.

Since 1974, the no fault insurance system has enabled New Yorkers to quickly receive benefits when they have been injured in auto accidents. For most injuries, an injured person receives benefits for medical expenses, lost wages and related expenses from her own auto insurance company. The law prevents the injured person from suing the driver responsible for the accident unless she has suffered a “serious injury,” such as death, dismemberment, loss of a fetus or significant disfigurement. This provision in the law keeps relatively minor accidents out of the court system, freeing the courts to focus on more serious cases.

The proposed legislation would broaden the law’s definition of serious injury to include injuries such as torn muscles, less serious neck and back injuries and injuries requiring minor surgery. Also, it would take the judgment over whether an injury meets the law’s definition of “serious injury” away from the judge and give it to a jury. This approach will prevent judges from quickly filtering out lawsuits that do not qualify for exception to the no fault system.

“If this proposal becomes law, minor injuries from fender benders will end up in the courts,” said IIABNY Chair of the Board David M. Gelia. “This will delay recoveries for the injured, bog down New York’s already overburdened court system, increase the cost of handling these claims and eventually result in higher auto insurance premiums for every vehicle owner in the state of New York.”

Gelia also noted the legislation would encourage plaintiffs to reject settlement offers and try to convince juries they endured serious injuries, further burdening the court system.

“We believe New York’s no fault insurance system can and should be improved with common-sense reforms,” Gelia said. “This legislation is a major step in the wrong direction.”