OGC Opinion No. 08-07-29
The Office of General Counsel issued the following opinion on July 30, 2008, representing the position of the New York Insurance Department.
RE: No-Fault Deductible
Question Presented:
May an injured person, who has no-fault insurance coverage written with a $200 family deductible, seek compensation for that deductible from the insurer of the bus in which he was riding when injured?
Conclusion:
No. An injured person covered by no-fault insurance that was written with a deductible cannot seek compensation for the deductible from the insurer of the bus in which he was injured.
Facts:
The inquirer represents a client who was injured in an accident while traveling in the bus of a common carrier. The injured person is covered by his father’s no-fault insurance policy, which was written with a $200 deductible. Pursuant to that policy, the insurer deducted from reimbursement due the injured person payment for the first $200 of no-fault medical expenses. The injured person now seeks payment of the $200 deductible from the common carrier, which is self-insured.
Analysis:
The policyholder in this inquiry has elected to pay a family deductible as part of his no-fault coverage, an option set forth in N.Y. Comp. Codes R. & Regs. tit. 11 § 65-1.6 (2001) (Regulation 68-C):
Each insurance company which offers insurance policies to satisfy the minimum requirements of article 51 shall offer the policy prescribed in this Subpart with a family deductible of $200 and without any deductible…
Under the terms of his no-fault insurance policy, the policyholder here has chosen to pay a $200 family deductible.
N.Y. Ins. Law § 5103 (McKinney 2000), which governs entitlement to first party benefits, also is relevant to your query. That statute provides:
(a) Every owner’s policy of liability insurance issued on a motor vehicle in satisfaction of the requirements of article six or eight of the vehicle and traffic law shall also provide for…the payment of first party benefits to:
(1) Persons, other than occupants of another motor vehicle or a motorcycle, for loss arising out of the use or operation in this state of such motor vehicle. In the case of occupants of a bus other than operators, owners, and employees of the owner or operator of the bus, the coverage for first party benefits shall be afforded under the policy or policies, if any, providing first party benefits to the injured person and members of his household for loss arising out of the use or operation of any motor vehicle of such household. In the event there is no such policy, first party benefits shall be provided by the insurer of such bus. (Emphasis added.)
The Insurance Law thus requires the insurer of the bus to pay first party benefits only in the event that the injured occupant has no coverage of his own.
The occupant in this instance has coverage as a household member in which the policyholder has chosen to purchase no-fault coverage, subject to a $200 deductible for a lesser premium. The common carrier is self-insured, and is only statutorily obligated to pay first party benefits when the injured occupant is not otherwise covered. Given that the occupant here is covered by a no-fault policy, the common carrier is not required to provide first party benefits to the occupant, which includes the $200 deductible in question.
For further information, you may contact Principal Attorney Lawrence M. Fuchsberg at the New York City office.