A decision issued by the New York Court of Appeals early in June extends application of the court-created “preclusion” rule in no-fault insurance cases, which provides that an insurer’s failure to timely pay or deny a claim results in an insurer being precluded from interposing a defense against payment of the claim, except where the defense raised is lack of coverage. The opinion, in Viviane Etienne Medical Care v. Country-Wide Ins. Co.,1 has important practical implications for consumers, health care providers, and automobile insurance carriers in the state. By decreasing the burden of proof necessary for medical providers to establish their entitlement to summary judgment, the court has increased the likelihood of the submission of fraudulent no-fault claims to insurance companies—and it has increased the risk that insurers will be required to pay out on those fraudulent claims.

The No-Fault System

Under New York’s no-fault law,2 automobile insurance policies must provide for the payment of first-party benefits to certain persons “for loss arising out of the use or operation in this state of [a] motor vehicle.”3 These benefits are intended to reimburse a person for “basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle.”4 Covered expenses include those incurred for “necessary” medical services.5 Thus, to establish entitlement to no-fault benefits for medical services, a party must demonstrate that the loss arose from an automobile accident and that the expenses incurred were medically necessary.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]