$200,000 No-Fault Coverage for NYC Taxis: Murzik Taxi, TLC Rule 58-13, and Pedestrians

Most New Yorkers — including plenty of lawyers — assume no-fault benefits top out at $50,000 of basic economic loss. For New York City taxicabs, that assumption is wrong by a factor of four. In Murzik Taxi, Inc. v Lutheran Med. Ctr., the Second Department held that taxicab owners must maintain coverage of not less than $200,000 per person for basic economic losses under the Taxi and Limousine Commission’s rules, and that a self-insurer claiming exhaustion has to prove it with documents.

Key Takeaways

• Taxicab owners are required to maintain liability coverage of at least $200,000 per person for basic economic losses under Rules of City of NY Taxi and Limousine Commission § 58-13 — not the standard $50,000.
• The self-insured taxi owner’s argument that its bond or policy was limited to $50,000 under 11 NYCRR 65-2.2 was rejected.
• The plaintiff also failed to submit the policy, bond, or any documentary evidence to establish exhaustion of coverage — a proof failure that doomed the exhaustion defense independently.
• The elevated limit applies for pedestrians struck by cabs as well as cab occupants, with significant consequences for hospitals, providers, and loss transfer.

The Decision

Murzik Taxi, Inc. v Lutheran Med. Ctr., 2021 NY Slip Op 02302 (2d Dept. 2021)

This case is is a an interesting loss for the Medallions and the black cars registered as Ubers. In avoiding a $58,000 hospital bill, it looks like the rules for this segment of the no-fault motoring population have changed.

“In the alternative, the plaintiff asserts that, as a self-insurer, its bond or policy was limited to $50,000 (see 11 NYCRR 65-2.2, ). Contrary to the plaintiff’s contention, taxicab owners, such as the plaintiff, are required to maintain liability coverage through an insurance policy or bond in an amount not less than $200,000 per person for basic economic losses (see Rules of City of NY Taxi and Limousine Commn § 58-13; see also Mount Sinai Hosp. v Dust Tr., Inc., 104 AD3d 823, 823-824). Further, the plaintiff failed to submit the insurance policy or bond, or any other documentary evidence for that matter, to establish that the insurance coverage was exhausted.”

Look at the underlined portion and tell me what that means. For one, I can tell you American Transit’s verification protocols on larger level claims are probably improper and will create another bad faith and GBL 349 argument. But think about what this could mean for loss transfer… wow..

The Legal Framework: Basic Economic Loss and the Taxi Exception

Under Insurance Law Article 51, “basic economic loss” — the pool of first-party no-fault benefits covering medical expenses, lost earnings, and other reasonable expenses — is ordinarily capped at $50,000 per person. That figure is baked into the mandatory endorsement and into how carriers, hospitals, and no-fault litigants think about claim values.

But New York City layers its own regulatory regime on top. The Taxi and Limousine Commission, which licenses medallion cabs and for-hire vehicles, sets its own financial responsibility requirements as a condition of operating. Under TLC Rule § 58-13, as applied in Murzik Taxi, that means coverage of not less than $200,000 per person for basic economic losses. A taxi owner — including a self-insured one posting a bond — cannot fall back on the generic $50,000 figure in 11 NYCRR 65-2.2.

The second, equally important holding is evidentiary. Exhaustion of coverage is a defense the payor must prove. The Murzik Taxi plaintiff submitted no policy, no bond, and no documentary evidence of exhaustion at all. Even a payor with a genuine exhaustion story loses if the file does not come with the papers.

Why This Matters for Hospitals, Providers, and Injured People

The practical population covered by this rule is enormous: every occupant of a New York City cab, and — as the title of this post says — pedestrians struck by one. A hospital holding a large bill from a taxi-pedestrian accident, like the $58,000 Lutheran Medical Center bill here, has four times the benefit pool that a standard private-passenger claim would offer before exhaustion becomes a live issue.

For self-insured medallion fleets and black cars operating as Ubers, the decision is expensive on two fronts. The nominal exposure per person quadruples, and the proof burden on exhaustion means a fleet cannot simply assert that its bond ran out — it must produce the bond and a payment ledger.

The original post flagged two downstream effects worth restating. First, verification protocols built around a $50,000 ceiling are miscalibrated for these claims; aggressive delay tactics on large taxi claims invite bad faith and General Business Law § 349 arguments. Second, loss transfer: taxis are vehicles for hire, squarely within Insurance Law § 5105’s inter-company reimbursement scheme, so a $200,000 benefit pool dramatically raises what one carrier can chase another for in mandatory arbitration.

For injured pedestrians, the elevated no-fault pool is separate from any bodily injury lawsuit against the cab’s owner or driver. The litigation landscape for those third-party claims changed materially with New York’s 2026 auto tort reform, but first-party basic economic loss benefits — and the taxi-specific $200,000 floor — operate independently of fault.

Practice Pointers

• Hospitals and providers: before writing off a large bill as over-limits, confirm whether the vehicle was TLC-licensed. The exhaustion point may sit at $200,000, not $50,000.
• Providers’ counsel: demand the policy or bond and complete payment ledgers in discovery. Murzik Taxi makes the absence of documentary proof of exhaustion independently fatal.
• Fleet payors: audit bonds and policies against TLC § 58-13 and keep exhaustion documentation litigation-ready.
• Carriers: revisit loss-transfer screening on taxi files; the recoverable pool is larger than legacy protocols assume.

Frequently Asked Questions

How much no-fault coverage does a NYC taxi have to carry?

Under Rules of City of NY Taxi and Limousine Commission § 58-13, as applied in Murzik Taxi v Lutheran Medical Center, taxicab owners must maintain an insurance policy or bond of not less than $200,000 per person for basic economic losses — four times the standard $50,000.

Does the $200,000 limit cover pedestrians hit by a cab?

Yes. The elevated basic economic loss coverage applies to pedestrians struck by the taxi as well as to its occupants, which matters enormously for hospital bills and lost-wage claims arising out of taxi accidents.

What must a taxi owner prove to win an exhaustion-of-coverage defense?

Documents. The Murzik Taxi plaintiff lost in part because it “failed to submit the insurance policy or bond, or any other documentary evidence” showing that coverage was exhausted. A bare assertion of exhaustion is not proof.

Related Resources

• Priority of payment in New York no-fault
• The firm’s Legal Encyclopedia
• Long Island car accident lawyer
• Understanding collateral estoppel in New York no-fault insurance coverage disputes
• When appellate courts grant summary judgment because loss was not an insured event
• How absence of business record entries can negate motor vehicle accident claims
• Insurance material misrepresentations and the preponderance standard
• New York No-Fault Insurance Law