No-Fault Benefits (Part 4 – APIP and OBEL)

New York State law requires that every auto insurance policy issued in New York must provide the mandatory minimum of $50,000 in personal injury protection or “PIP”.  As you may recall, PIP provides coverage for the following: medical expenses; lost wages; other necessary expenses; and a death benefit.  These categories are considered “basic economic loss”. 


If you aren’t already aware, you have the option of purchasing additional coverage through either APIP or OBEL.  APIP stands for additional personal injury protection.  OBEL stands for optional basic economic loss.  Both options provide extra protection beyond the mandatory minimum of $50,000.  Either option may be purchased through your insurance carrier for an additional premium – typically, the premium is minimal. 



APIP coverage is typically offered by insurance carriers in increments of $50,000.  Remember, basic personal injury protection (PIP) provides coverage up to $50,000, so APIP coverage would increase that coverage in increments of $50,000. 


An APIP policy will extend your basic economic loss coverage.  There are different types of APIP coverage.  You may purchase APIP protection for lost wages, medical expenses or additional expenses.  One thing to consider when purchasing a motor vehicle insurance policy is whether to purchase APIP coverage for lost wages.  If you recall from the last blog, lost wage benefits under the minimum no-fault policy only provides for 80% of your wages up to $2000 per month.


If you earn more than $2500 per month, you will not be compensated for your entire loss and you may have difficulty making ends meet while you are rehabilitating.  However, APIP coverage allows you to increase that monthly amount so that your monthly salary is covered.  For example: if you earn $4000 per month, you may want to consider purchasing an APIP policy that will increase your lost wage earnings to $4000 per month.  If you are injured in a motor vehicle accident and are unable to work, APIP will cover 80% of $4000, but the underlying no-fault policy will pay the first $2000; APIP would cover the remaining amount. 


Important Note: your APIP insurance carrier has the right to recover the monies they have paid on your behalf if you have a successful personal injury claim against the person who caused the accident.  For example, if they paid for additional lost wages or medical expenses, they will seek the return of that money.  Typically, the APIP insurance carrier will look to the other driver for reimbursement.  However, if you settle your claim with the other driver’s insurance carrier and you do not protect your APIP carrier’s right to reimbursement, you could be responsible for paying the money back out of your settlement proceeds.  It is best if you have a Long Island personal injury attorney representing you at this point to make sure that your rights are protected. 



OBEL coverage also provides additional coverage beyond the $50,000 in basic economic loss coverage.  With OBEL coverage, you decide who will receive the money.  For instance, you may seek to have the optional coverage reimburse your physical therapist or you may seek to have the optional coverage go towards lost wages.  This coverage comes into play after you have exhausted the initial $50,000 of basic economic loss coverage. 


Check out the whole Series:

No-Fault Benefits (Part 1 – Overview)

No-Fault Benefits (Part 2 – Medical Treatment)

No-Fault Benefits (Part 3 – Lost Wages)

No-Fault Benefits (Part 4 – APIP and OBEL) — Current

No-Fault Benefits (Part 5 – Denial of Benefits)