New York’s Personal Injury Protection (PIP) framework plays a central role in the state’s no-fault insurance model. Insurers provide swift reimbursements for medical bills and wage losses following auto accidents, regardless of fault. The setup prioritizes speed — but subrogation adds layers of complexity, as insurers seek to recover costs from at-fault parties after the fact.
For TPAs, subrogation is one of the highest-ROI activities in claims management. Yet it’s frequently under-resourced and inconsistently executed.
When PIP Subrogation Rights Arise in New York
New York Insurance Law §5105 establishes the right of a paying insurer to seek reimbursement from the insurer of an at-fault driver when:
- The at-fault driver was operating a vehicle registered in another state
- The accident involved a commercial vehicle (i.e., vehicle used primarily for commercial purposes)
- Liability is established against a party other than the insured
Arbitration through the Arbitration Forums, Inc. is the prescribed mechanism for inter-company disputes — faster and cheaper than litigation for most cases.
The Cost of Inaction
Every month a subrogation opportunity sits in a claims file without action is a month of:
- Statute of limitations running (generally 3 years for PIP subrogation in NY)
- Evidence degrading (accident reconstruction, witness availability)
- At-fault insurer building a defense
- Money left on the table
Industry studies consistently show that TPAs pursuing subrogation systematically recover 3–5x more than those handling it reactively.
Early Identification: The Key to Higher Recovery Rates
The best subrogation programs front-load identification. Rather than reviewing closed files for opportunities, leading TPAs flag subrogation potential at FNOL and build it into the investigation workflow.
Key FNOL data points that signal subrogation opportunity:
- Out-of-state vehicle involved as adverse party
- Commercial vehicle identified in accident report
- Police report indicating clear at-fault party
- Accident location in a pattern corridor (some intersections generate disproportionate subrogation cases)
- Injury severity warranting the cost of pursuit
Investigation Best Practices
Once flagged, preserving the subrogation case requires:
Prompt accident reconstruction — Skid marks, vehicle damage patterns, and traffic camera footage deteriorate rapidly. Engaging an expert early locks in the strongest version of your case.
Recorded statements — Get the insured’s account while memory is fresh. Document road conditions, traffic signals, and the sequence of events in detail.
Medical record correlation — Ensure that treatment claimed is consistent with mechanism of injury. Inconsistencies weaken the underlying PIP claim and the subrogation case.
Demand package preparation — A well-organized package (accident report, bills, medical records, lost wage documentation) moves through arbitration faster and with less friction.
Arbitration vs. Litigation
For inter-company disputes under §5105, Arbitration Forums arbitration is typically mandatory. Key advantages:
- Speed: Most cases resolve within 6–12 months
- Cost: Significantly less than civil litigation
- Expertise: Arbitrators understand PIP law; no jury education needed
When the adverse party is uninsured or underinsured, litigation may be necessary — but this requires close coordination with coverage counsel experienced in NY no-fault.
Technology’s Role in Subrogation
Modern claims platforms can automate much of the early identification work:
- Flag out-of-state plates at FNOL from DMV data
- Pull public accident report data to identify adverse vehicles
- Track statute deadlines automatically for every file
- Generate demand package templates populated with existing claim data
The result is a systematic pipeline rather than an adjuster-dependent process that falls through the cracks during high-volume periods.
Measuring Your Subrogation Program
TPAs should track and report on:
- Identification rate: What % of eligible claims are flagged?
- Referral rate: What % of flagged claims are referred to subrogation?
- Recovery rate: What % of referred claims result in recovery?
- Recovery-to-paid ratio: Dollars recovered per dollar of PIP benefits paid
- Cycle time: Average days from FNOL to recovery
Benchmarking against these metrics reveals exactly where the leakage is — and where to invest.
Aegis One’s claims platform includes automated subrogation identification and tracking built into every file from day one. Contact us to see how we maximize recoveries for our carrier partners.
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