The Rogak Report: 20 Feb 2006 ** Basic PIP Subrogation **
- RECOVERING BASIC PIP PAYMENTS FROM A NON-COVERED PERSON
Can a no-fault insurer who has paid first party benefits to a covered
person as a result of an auto accident recover basic PIP payments
against a non-covered person?
The answer is yes, but New York law makes the right of recovery very
First, what kind of non-covered persons would be involved in an auto
accident? Motorcycle riders, for one. Municipalities whose
negligence in road maintenance contributed to an auto accident, are
another example. And a garage whose mechanic did a faulty brake job
would also be a non-covered person.
Take the example of an MVA between an auto and a motorcycle. The
auto is insured by Alpha Insurance and the motorcycle is insured by
Beta Insurance. The occupants of the auto receive no-fault benefits
Now, if the occupants of the auto commence a bodily injury suit
against the motorcyclist, then their insurer, Alpha, does not have a
right to sue Beta Insurance to recover basic PIP. It is only if the
auto occupants do NOT commence a lawsuit within two years, that Alpha
has the right to sue the motorcyclist for PIP reimbursement.
This is not the same as loss transfer, which must go to arbitration.
The right of recovery of basic PIP against a non-covered person is
limited to situations where the covered person does not sue the non-
covered person within two years of the date of loss, and in that
situation, the covered person's PIP insurer may sue the non-covered
person for PIP reimbursement based on actual fault.
In New York, motorcycle insurance does not provide basic PIP to the
occupants of the motorcycle. However, motorcycle policies do provide
basic PIP to anybody else injured in an accident involving the
motorcycle (e.g., a pedestrian).
Incidentally, if the covered person sues the non-covered person, he
cannot sue for his basic economic loss.
Authority: Country-Wide Ins. Co. v. 3-M Production Sales, 96 A.D.2d
569, 465 N.Y.S.2d 255 (2 Dept 1983).