If you’ve been in a car accident that wasn’t your fault, you’ve probably heard some version of this advice: “Just deal directly with the other driver’s insurance company. It was their fault, so let them handle it.” It sounds reasonable. It’s also, in many cases, bad advice.
Here’s the pattern we see over and over: a client is in an accident, the other driver is clearly at fault, and their own insurance company suggests they negotiate directly with the at-fault driver’s carrier. Weeks or even months later, the client is stuck arguing with an adjuster who has no contract with them, no obligation to treat them fairly, and every incentive to lowball the value of their vehicle. By the time an attorney gets involved, usually because of an injury, the property damage side has often already cost the client leverage, and sometimes rights they didn’t know they were giving up.
Why People Go It Alone: The Fear of Rate Increases
Ask clients why they didn’t just file with their own carrier in the first place, and the answer is almost always the same: “I didn’t want my rates to go up.”
It’s an understandable fear. But in New York, when the accident wasn’t your fault, that fear is largely unfounded. Clients need to hear this before they make a decision they’ll regret.
What New York Law Actually Says
New York doesn’t leave this to an insurance company’s discretion. The rule boils down to one core requirement, with a couple of added layers on top:
The core rule: no fault, no surcharge. Regulation 100 (11 NYCRR § 169.1) only allows a surcharge, for property damage or bodily injury, including a No-Fault claim, if the insured was at fault. If you weren’t at fault, that’s the end of the analysis. It doesn’t matter how much the damage cost, whether anyone was injured, or which coverage paid the claim. The mere fact that an insurer opens a bodily injury reserve doesn’t count as a fault finding either.
Two added layers, both assuming fault exists in the first place:
- Even a genuinely at-fault accident can’t be surcharged if property damage is $2,000 or under, unless there was bodily injury or the driver had more than one accident in the merit rating period (typically three years).
- Comprehensive claims (theft, fire, hitting a deer, and similar) can never be surcharged at all, since there’s no other driver to be at fault.
Put simply: a client who is rear-ended and files with their own carrier for collision repairs, or reports injuries through their No-Fault PIP coverage, is protected by law from a rate increase tied to that accident, provided fault is clearly established on the other driver.
There’s one more detail worth knowing: insurers generally can’t surcharge a claim where they (or the insured) recover at least one-third of its value through subrogation against the at-fault driver’s carrier. In a clean liability case, the kind we see constantly, that recovery threshold is easily met.
A quick note on comprehensive claims, since they come up in this discussion: this is coverage for damage to your own car that isn’t caused by hitting another vehicle, such as theft, fire, flood, hitting a deer, or storm damage. There’s no other driver to be at fault, which is why these claims get the cleanest protection of all.
The Advice We Give Every Client
The law protects you, but it doesn’t enforce itself automatically. Our advice is simple and something every accident victim should do before agreeing to any settlement:
Use the insurance company you already pay. This is why you pay insurance premiums. Filing your property damage claim with your own carrier means your adjuster negotiates the vehicle’s value on your behalf, instead of you facing the other driver’s adjuster alone with no contract and no leverage. Your carrier then pursues subrogation against the at-fault driver’s insurer to recover what it paid out. This costs you nothing extra; you’re simply letting the company you already pay for do the job it exists to do.
Get it in writing. Ask your insurance company to confirm, in writing, that the claim is being coded as not-at-fault for merit rating purposes. This single step turns an abstract legal protection into a documented fact, one that makes it far harder for a rate increase or lost discount to slip through unnoticed, and far easier to challenge if it does.
The Bigger Risk: Jeopardizing Your Injury Claim
Everything above assumes the only thing at stake is the value of the vehicle. It isn’t. When a client negotiates their property damage claim directly with the other driver’s insurance company, they can unknowingly undermine an injury claim that hasn’t even been filed yet.
Anything you say can be used against you, even about the car. Adjusters often ask for a “quick recorded statement” framed as being about the vehicle damage. In practice, property damage and bodily injury are frequently handled under the same claim file, sometimes by the same adjuster. What a client says during that call with an adjuster becomes part of the record. Insurers can and do use those statements later to minimize the injury claim or to refute liability.
The other company’s fault assessment goes unchallenged. When a client accepts a property damage settlement without counsel, they’ve effectively let the insurer’s version of fault stand, including any comparative negligence reduction, however small, that the adjuster quietly baked into the offer to close the file faster. That accepted fault split becomes a data point the insurer will point to later when valuing, or disputing, the injury claim.
Minimal vehicle damage becomes a weapon against real injuries. Insurers and defense counsel routinely argue that low visible vehicle damage means the injury can’t be serious or even related to the accident, regardless of the actual biomechanics involved. A client who rushes to settle the property claim without an independent assessment of the full extent of damage, including hidden frame or structural damage, is inadvertently helping build a defense to their own injury case.
The evidence disappears fast. Once a vehicle is repaired or sent to salvage, the physical evidence of impact severity is gone. If that happens before injuries are documented and properly connected to the collision, the client loses evidence that could have supported causation and severity down the line.
The paperwork may release more than the car. Some property damage settlement documents contain release language broader than just the vehicle. Signing without reading carefully risks giving up more than intended, sometimes including claims connected to your injury.
You’re negotiating against a professional, and you have probably never done this before. The adjuster you’re talking to values vehicles and negotiates settlements every day. They know the valuation software, they know which comparables to pick, and they know from experience what most people will accept without pushing back. On the other hand, you are likely doing this for the first time in your life, at the same moment you’re dealing with the stress of an accident, a rental car, and possibly an injury. That’s not a fair fight, and it’s not supposed to be. The adjuster works for the other driver and the goal is to pay as little as possible.
None of this means property damage and injury claims can’t ever be handled separately. It means they shouldn’t be handled carelessly, and a client negotiating alone, focused only on getting their car fixed or replaced, has no way of knowing which conversations, documents, or accepted terms will resurface later in a very different context.
Why This Matters Beyond the Repair Bill
Fear of a rate hike shouldn’t be the reason someone accepts a lowball settlement, deals directly with an adversarial insurance company with no contractual duty to them, or skips filing a claim they’re entitled to make. When clients understand that the law is actually on their side, they make better decisions, and they don’t have to choose between protecting their premium and protecting their claim.
If You’ve Been Seriously Injured, Don’t Go It Alone
Property damage is only part of the picture. If you or a loved one has been seriously injured in a motor vehicle accident, the stakes are higher, and so is the value of experienced representation.
The attorneys at Lacy Katzen have been helping auto accident victims in New York for over 75 years. We know how insurance companies operate, how claims are valued, and how to make sure our clients aren’t pressured into a settlement that isn’t in their best interest.
Call today or contact us via email for a free consultation.
