Insurance – Motor Vehicle Accident Indemnification Corporation Law – Compensation Assured for Innocent Automobile Accident Victims

A 1958 New York statute requires the organization of an Indemnification Corporation by companies selling automobile liability insurance within the state. The corporation will assess members in order to establish a fund which will be used to reimburse persons who are injured in a motor vehicle accident and are unable to collect from the person causing the injury. In order to qualify, the injured party must not be covered by a policy of automobile insurance nor may he own an uninsured motor vehicle. He must secure a judgment against the financially irresponsible driver and petition the court to order the Indemnification Corporation to pay the claim. If the identity of the person causing the injury is unascertainable the injured party may apply to the state supreme court for permission to bring an application upon his claim against the Indemnification Corporation. Provision is also made for out-of-court settlement between the corporation and the injured party. A companion statute requires that every policy of automobile liability insurance contain a clause providing the insured with the same protection afforded a qualified person under the Indemnification Law. 27 N.Y. Consol. Laws (McKinney, 1952; Supp. 1958) pt. 2, Art. 17A, §§600-626; pt. 1, §167(2).