When you’ve been injured in a car accident and are looking to claim compensation, you have a choice to make as to how you should try and claim compensation—should you file an insurance claim or should you pursue legal action with a personal injury lawsuit? While both paths ultimately lead to compensation, there are several differences that can influence your choice. As your experienced car accident lawyer NYC, we at Gabriel Law will help you understand the difference between the options, break down the pros and cons, and help you decide the best course of action that protects your rights and maximizes your compensation.
Insurance Claims in New York City
In New York, if you want to claim compensation for your injuries, the first formal step is filing an insurance claim. As a formal and legal demand made by the injured party, the responsibility to respond to this demand would fall on either the insurance of the provider of the injured party, or that of the party at-fault.
When dealing with car accidents, New York is a ‘no-fault’ insurance state. Therefore, if you are injured in a car accident, your insurer has a duty to compensate you for any loss of wages, medical expenses, and any other reasonable expenses connected to the accident. This obligation persists, regardless of your potential fault in the incident. However, there are also several instances where you may become ineligible to receive no-fault benefits.
It is also worth noting that your no-fault insurance coverage caps off at $50,000 and only accounts for any material losses and costs, meaning your insurance payout will not consider factors such as mental trauma and pain and suffering.
But what if costs exceed the $50,000 threshold? Fortunately, there are still options under insurance claims you can pursue. If the costs exceed your coverage, you can file a claim with the at-fault driver’s liability insurance to recover the additional costs since it is designed to cover damages and injuries a person may have caused to others in an auto accident.
In summary, if you’ve been injured in a car accident, you have to file a claim with your insurer. Since New York is a ‘no-fault’ insurance state, you will most likely receive some form of compensation. However, in the event your costs exceed the threshold of $50,000, you can still pursue the insurance route by filing a claim against the other party’s liability insurance.
Lawsuits in New York City
If you want to take the matter to court, you will have to file a personal injury lawsuit. However, in New York, you can only file a personal injury lawsuit if you can show that the basic economic damages you’ve suffered exceed $50,000 or that your injuries meet New York’s “serious injury” threshold.
A person is deemed to have suffered a “serious injury,” as defined in Section 5102 (d) of New York State Insurance Law, when the car accident results in one or more of the following injuries:
- Death;
- Dismemberment;
- Significant Disfigurement;
- Fracture;
- Loss of fetus;
- Permanent loss of the use of a body organ, member, function, or system;
- Significant limitation of use of a bodily function or system; or
- The injury/impairment prevents a person from performing acts that are part of a person’s usual daily activities for a period of at least 90 days within the first 180 days immediately following the accident. (90/180 category).
With a personal injury lawsuit, there is no upper limit to how much you can claim, but the court typically awards the amount it deems appropriate to cover all the losses you’ve suffered. Unlike in insurance claims, you aren’t limited to only economic losses. The court will also look into non-economic losses such as emotional distress and loss of enjoyment of life.
Should you choose to file a lawsuit, you must keep in mind that you are under a ticking clock from the moment of the accident. This is known as the statute of limitations, and according to this law, a personal injury lawsuit must be filed within three years of the date of the accident.
Alternatively, should the car accident result in a death, the representative of the deceased person’s estate can file a wrongful death lawsuit on behalf of the deceased family. This has a statute of limitations of two years from the date of the decedent’s death. It is worth noting that the date of the accident and the date of death would not always be the same.
Comparison
| Insurance Claim | Lawsuit | |
| When it starts | With your own insurer or the at-fault driver’s insurance | Once the lawsuit has been filed in court |
| Types | No-fault and liability insurance | Personal injury and wrongful death lawsuits |
| Pre-requisite | N/A | Basic economic damage exceeding $50,000 or passing the serious injury threshold |
| Purpose | To cover immediate costs (medical expenses, loss of wages, and other basic expenses) | To recover full compensation, including for pain and suffering |
| Damages | Economic damages only | Economic, Non-economic, and Punitive damages |
| Limit | $50,000 | No cap if liability is proven |
| Speed of Resolution | Within a few months | Takes longer (depends on the complexity) |
Conclusion
Claims and lawsuits are two distinct legal actions designed to help injured parties get compensation for their injuries after an accident. While both paths eventually reach the same goal, your circumstances may determine one path to be better than the other. If you’re having a hard time deciding on which path to follow, contact us at Gabriel Law. Our personal injury law firm NYC is always ready to lend you our support in protecting your rights and maximizing your compensation.
