The No-Fault Law, Ins. Law §5101, et seq. and corresponding regulations (11 NYCRR 65-1.1, et seq.) provide for basic personal injury protection (PIP) benefits of $50,000 for reimbursement of covered medical benefits, lost wages and other necessary expenses. An insured may increase PIP coverage and purchase additional benefits above basic economic loss, such as additional personal injury protection coverage (APIP), as provided by 11 NYCRR §65-1.3, and optional basic economic loss coverage (OBEL), as specified in Insurance Law §5102(a)(5).
Ordinarily, the insurance carrier is not required to pay any claims beyond the monetary limits of the policy, and once the policy limits have been exhausted, the insurance carrier’s duties under the insurance contract ceases.1 Policy exhaustion is a coverage defense and, therefore, is not precluded if not raised in a timely denial of claim. Thus, if the insurer pays out the $50,000 (and any increased benefits, as applicable), it may refuse to pay any new claims for no-fault benefits.
