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 limited.

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 from Alpha.

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.

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 persons 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)