N.Y. Insurance Law Section 5106
Fair claims settlement


Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied. All overdue payments shall bear interest at the rate of two percent per month. If a valid claim or portion was overdue, the claimant shall also be entitled to recover his attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated by the superintendent in regulations.


Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent. Such simplified procedures shall include an expedited eligibility hearing option, when required, to designate the insurer for first party benefits pursuant to subsection (d) of this section. The expedited eligibility hearing option shall be a forum for eligibility disputes only, and shall not include the submission of any particular bill, payment or claim for any specific benefit for adjudication, nor shall it consider any other defense to payment.


An award by an arbitrator shall be binding except where vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent. The grounds for vacating or modifying an arbitrator’s award by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s fees, the insurer or the claimant may institute a court action to adjudicate the dispute de novo.


(1) Except as provided in paragraph two of this subsection, where there is reasonable belief more than one insurer would be the source of first party benefits, the insurers may agree among themselves, if there is a valid basis therefor, that one of them will accept and pay the claim initially. If there is no such agreement, then the first insurer to whom notice of claim is given shall be responsible for payment. Any such dispute shall be resolved in accordance with the arbitration procedures established pursuant to § 5105 (Settlement between insurers)section five thousand one hundred five of this article and regulations as promulgated by the superintendent, and any insurer paying first-party benefits shall be reimbursed by other insurers for their proportionate share of the costs of the claim and the allocated expenses of processing the claim, in accordance with the provisions entitled “other coverage” contained in regulation and the provisions entitled “other sources of first-party benefits” contained in regulation. If there is no such insurer and the motor vehicle accident occurs in this state, then an applicant who is a qualified person as defined in article 52 (Motor Vehicle Accident Indemnification Corporation)article fifty-two of this chapter shall institute the claim against the motor vehicle accident indemnification corporation.


A group policy issued pursuant to section three thousand four hundred fifty-five or three thousand four hundred fifty-eight of this chapter shall provide first party benefits when a dispute exists as to whether a driver was using or operating a motor vehicle in connection with a transportation network company or peer-to-peer car sharing program when loss, damage, injury, or death occurs. A transportation network company or peer-to-peer car sharing program administrator shall notify the insurer that issued the owner’s policy of liability insurance of the dispute within ten business days of becoming aware that the dispute exists. When there is a dispute, the group insurer liable for the payment of first party benefits under a group policy shall have the right to recover the amount paid from the driver’s insurer or in the case of a peer-to-peer car sharing program, the shared vehicle owner’s insurer to the extent that the driver would have been liable to pay damages in an action at law.


With respect to an action for serious personal injury permissible under § 5104 (Causes of action for personal injury)section five thousand one hundred four of this article, an award or decision of an arbitrator or master arbitrator or that is court rendered pursuant to subsection (c) of this section seeking no-fault reimbursement by or for medical providers, shall not be given collateral estoppel effect in any action or proceeding arising out of the same occurrence and shall not be admissible in any action or proceeding in actions seeking damages for bodily injuries, pain suffering, medical care and loss of wages as evidence of any facts.

Source: Section 5106 — Fair claims settlement, https://www.­nysenate.­gov/legislation/laws/ISC/5106 (updated Dec. 29, 2023; accessed May 25, 2024).

May 25, 2024

Last modified:
Dec. 29, 2023

§ 5106’s source at nysenate​.gov

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