Property Damage and Bodily Injury Claims in New York

Bodily injury and property damage are separate claims

Authority: Insurance Law §§ 5102(a), 5103; Vehicle and Traffic Law § 311(4)(a); CPLR 214(4).

A single crash generates two legally distinct claims, and clients are often surprised that resolving one does nothing for the other.

The bodily injury claim is about the person: medical treatment, lost earnings, and — if the serious-injury threshold is met — pain and suffering. No-fault pays the first layer of economic loss regardless of fault, capped at the $50,000 basic economic loss figure, and the liability claim addresses what is left.

The property damage claim is about the vehicle and its contents. No-fault does not cover it at all: basic economic loss under Insurance Law § 5102(a) is confined to medical, wage and incidental expense. Vehicle damage is paid either by your own collision coverage, which is optional in New York, or by the at-fault driver’s property damage liability coverage, for which the statutory minimum is $10,000 under Vehicle and Traffic Law § 311.

Because the minimum is $10,000, a modern total loss frequently exceeds the at-fault driver’s entire property damage limit, which is a practical argument for carrying collision coverage regardless of fault.

Different limitations period

A claim for injury to property carries a three-year period under CPLR 214(4), measured separately from the personal-injury claim. They are usually pleaded together, but they are distinct causes of action.

Settling the property claim does not settle the injury claim

A property damage release signed with an adjuster early — often within days, while the vehicle is in a yard accruing storage — should be confined to property damage on its face. A broadly worded general release can be argued to extinguish the injury claim too.

Diminished value and loss of use

The measure of damage to a repairable vehicle is the lesser of the cost of repair or the diminution in market value; for a total loss it is market value at the time of loss. Loss of use during a reasonable repair period is recoverable.

The no-fault lien reaches the injury recovery only

Under Insurance Law § 5104(b) the insurer’s lien attaches to the recovery against a non-covered person to the extent of first-party benefits paid or payable. Property damage proceeds are not first-party benefits and are not subject to that lien.

Handling the vehicle claim without damaging the injury claim

Authority: Insurance Law § 5102(a) (property damage is outside basic economic loss); Vehicle and Traffic Law § 311(4)(a); CPLR 214(4); 11 NYCRR 216 (Regulation 64, unfair claims settlement practices).

The vehicle claim moves on a timescale of days while the injury claim moves on a timescale of years, and that mismatch is where avoidable damage happens. An adjuster will often call about the car within 48 hours, before anyone has seen a doctor twice.

New York no-fault pays none of it. Basic economic loss under Insurance Law § 5102(a) is medical, wage and incidental expense only. The vehicle is covered by your own optional collision coverage, or by the at-fault driver’s property damage liability, for which the statutory minimum is just $10,000 — frequently less than a modern total loss.

Because the two claims are legally distinct causes of action, they can be settled separately, and they usually should be. The danger is the paperwork.

Read the release before signing anything about the car

A property damage settlement should be documented on a release confined, on its face, to property damage. A general release signed for a few thousand dollars of vehicle damage can be argued to extinguish the bodily injury claim as well. If the document does not say it is limited to property damage, it should not be signed until a lawyer has read it.

Storage charges accrue against you, not the insurer

A vehicle sitting in a tow yard accrues daily storage that can exceed the vehicle’s value within weeks. Authorising release of the vehicle protects the claim’s value — but photograph it thoroughly first, and preserve any component relevant to a products or crashworthiness theory before the vehicle is destroyed.

The measure of damage

For a repairable vehicle the recovery is the lesser of the reasonable cost of repair or the diminution in market value. For a total loss it is market value immediately before the loss. Loss of use during a reasonable repair period is recoverable, which is the basis for a rental claim where no rental coverage exists.

Diminished value survives a proper repair

A repaired vehicle with an accident history is worth less than an equivalent vehicle without one. That residual loss is a separate component of the property damage claim and is routinely omitted from an adjuster’s first offer.

Your own collision carrier will subrogate

If your collision coverage pays, the insurer is subrogated to your claim against the at-fault driver for that amount and will pursue it, including your deductible. A deductible recovered through subrogation is reimbursed to you, and that recovery is separate from the no-fault lien under Insurance Law § 5104(b), which attaches only to first-party benefits.

Claim-handling conduct is regulated

Insurance Regulation 64 (11 NYCRR 216) governs unfair claims settlement practices in New York, including the timeframes for acknowledging and deciding a claim and the obligation to explain the basis of a valuation. A documented failure to comply is worth raising with the Department of Financial Services.