Permissive Use, PIP Priority and a Pedestrian in the Crosswalk
Denise, a Brooklyn resident, insures her sedan with a New York personal auto policy: $25,000/$50,000 bodily injury, $10,000 property damage, $50,000 basic PIP, SUM of $100,000/$300,000, and a $500 collision deductible. Her son Marcus, 23, lives at home and owns his own car with a separate 25/50 policy. Marcus borrows Denise's car, drives to a job site, and lets coworker Tim - valid license, no auto insurance of his own - drive to buy lunch. Tim runs a red light, strikes pedestrian Priya in a crosswalk and a parked car. Priya has $120,000 in medical bills and $40,000 in lost wages; she carries her own New York policy with $50,000 PIP and $25,000 SUM. Priya's attorney calls.
1. Whose policy pays Priya's medical bills first, and how much is available?
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Denise's policy, up to $50,000 of basic PIP.
- A pedestrian struck by a motor vehicle is a covered person under New York no-fault, and PIP priority runs to the insurer of the vehicle that struck her.
- That vehicle is Denise's covered auto. Tim was a one-time permissive user, not a regular user, so the omnibus grant applies and the vehicle is an insured vehicle; Tim's own lack of insurance is irrelevant.
- Basic economic loss covers medical expenses and 80% of lost earnings up to a monthly cap, within the $50,000 per-person limit. With $120,000 of medical bills alone, PIP exhausts at $50,000.
- Priya's own $50,000 PIP is not first in line here; it does not stack with the striking vehicle's coverage to create $100,000 of first-party benefits.
2. What liability limits respond to Priya's claim, and does Marcus's policy change anything?
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$25,000 for Priya and $10,000 for the parked car, on Denise's policy.
- The $25,000/$50,000 are per-person and per-occurrence limits. A single injured person can collect no more than $25,000 of bodily injury, however large the damages.
- Tim is an insured under the omnibus/permissive use provision; the regular-use exclusion does not apply to a one-time borrower. Marcus's own policy is not the primary source - he was not operating a vehicle, and coverage for driving a non-owned auto is personal to Marcus's own liability, not to Tim's.
- Priya's remaining economic loss above basic economic loss, plus non-economic damages, are recoverable in tort only if she meets New York's serious-injury threshold. The $50,000 PIP payment is offset against her claim, so a $25,000 BI limit is a small fraction of a $160,000 loss.
- This is the classic underinsurance picture: an insured vehicle with minimum limits and a badly injured third party.
3. Can Priya recover under SUM? What if her SUM limit were higher?
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No SUM on these facts; with more SUM she would have had a claim.
- SUM (supplementary uninsured/underinsured motorists) is first-party coverage on the injured person's own policy. It responds when the at-fault vehicle's available liability limit is less than her SUM limit, and it pays the gap between the two, reduced by amounts already recovered.
- Priya's SUM is $25,000 and the tortfeasor's BI limit is $25,000. The gap is $0.
- Uninsured motorists coverage is also unavailable: the striking vehicle was insured, and Tim's personal lack of insurance does not make the vehicle uninsured.
- If Priya had carried $100,000 SUM, she could pursue up to $75,000 ($100,000 − $25,000) after exhausting the BI limit - again only after meeting the serious-injury threshold for the tort claim.
- Denise's SUM of $100,000/$300,000 protects Denise and her household for their own injuries; it does nothing for Priya.