What Is Loss Transfer in The Law World?

If an accident occurs the negligent motorist vehicle insurer has to pay some compensation according to the loss transfer. According to a loss transfer law firm in Newyork, Loss transfer applies to specific types of vehicles only. There are a few conditions that need to be checked for a compensation insurer to pursue a loss transfer against the negligent motorist’s vehicle.

This Loss transfer Opportunity is used to recover the otherwise non-recoverable First Party Benefits.

Conditions on which Loss Transfer depends on:

Though loss transfer is an opportunity to recover first-party benefits from the negligent motorist’s insurer in case of an accident. The compensation insurer can ask for loss transfer only if any one of the two conditions that are described below occurs.

At least one of the vehicles that means either the negligent motorist’s vehicle or the other vehicle:

  1. Weighs more than 6500 lbs when it is unloaded with any sort of goods, or
  2. Is used for the transportation purpose of persons or property for hires like a delivery truck or FedEx.

If one of these two conditions is met, the compensation insurer can claim for loss transfer with the help of a loss transfer law firm against the negligent motorist’s vehicle insurer.

What can be recovered in case of Loss Transfer?

According to Section 5102(b)(2) of N.Y.INS.LAW, a compensation insurer is free to demand loss transfer for the recovery of the $50,000 first-party benefits from the negligent motorist’s vehicle insurer.

It is important to note that loss transfer can demand only $50,000 first-party benefits, apart from that any amount or additional benefits paid over and above $50,000 should be done through conventional workers compensation provided under N.Y. WORKERS COMP LAW29.

How does loss transfer work?

  • The first party insurer or the compensation insurer gives all the statements to the negligent motorist’s insurer.
  • The negligent motorist’s insurer reimburses for those benefits after calculating the amount based on the percentage of how much the driver of the vehicle was at fault at the incident.
  • There will not be any reimbursement for the first $2000 benefits paid by the first party or the victim in this case according to the New York loss transfer law firm.
  • Reimbursement is made only for the actual benefits paid and other claims-related expenses incurred by the victim need not be paid as part of loss transfer.

Types of vehicles to be considered for Loss Transfer

Loss transfer can be issued only to specific types of vehicles. These vehicles involved in the accident have to be either a heavy commercial vehicle, an off-road vehicle, or motorcycles that people quite often drive.

Only when one of these types of vehicles is involved in the accident can the loss transfer can be demanded.


Loss Transfer only operates between insurers of different classes of vehicles. It applies only when the second party is at least partly at fault in the accident. The main purpose of loss transfer is to balance the cost of benefits between different types of vehicles.

Manolo Hilton
the authorManolo Hilton