Fraud is driving up the cost of auto insurance for New York State drivers. The heaviest hit? Those who reside in and near New York City’s five boroughs. According to a press release issued in April 2011 by the Insurance Information Institute, drivers in NYC and its surrounding suburbs are paying up to four times more for no-fault auto insurance than the state average. Albany motorists pay seven times less than NYC drivers, because there are fewer cases of fraud.
Auto insurance in the Empire State is a $10 billion industry. New York’s auto insurance system, the fourth largest in the nation, insures approximately nine million cars.
It pays to shop
Needless to say, learn the state requirements and shop for competitive prices on auto insurance policies. The State of New York operates an Interactive Guide to Automobile Insurance at www.ins.state.ny.us/auto/AutoSelect.htm. Compare sample auto premiums and information on the ranking of automobile insurers. Rankings are based on complaints filed by the New York Insurance Department.
New York’s mandatory auto insurance laws
In New York State, drivers are required to have minimum liability insurance coverage in the amounts of $50,000/$100,000/$10,000. The Empire State is unusual in that twice the bodily injury liability limits in the event the accident results in death is required in order to meet state auto insurance laws.
Drivers are required under New York law to have insurance with the following liability limits:
- $25,000 – bodily injury, one person, not resulting in death; $50,000 – bodily injury, one person, for any injury resulting in death
- $50,000 – bodily injury, per accident, not resulting in death, more than one person in any one accident; $100,000 for any injuries resulting in death
- $10,000 – property damage
Personal Injury Protection (PIP)
New Yorkers are required to carry PIP coverage, which pays for costs if you are involved in a car crash.
Uninsured/Underinsured motorist coverage
In addition to PIP coverage, New Yorkers are also required to carry uninsured/underinsured (UM/UIM) motorist coverage.
This coverage will cover you, up to the limits you have purchased, if you are in an accident caused by another driver and that driver does not have auto insurance coverage or is underinsured. Drivers are also protected under UM/UIM if you are in a car crash and the at-fault driver flees the scene.
Additional New York auto insurance requirements
- If a vehicle is not being used, the license plates must be returned to the state to cancel the registration.
- Out of state insurance is not acceptable if you are a New York driver. The law requires that you have an insurance purchased by a recognized, licensed Empire State agency.
- Automobile insurance must be in the same name as the registered owner. Failure to meet this requirement will result in suspension of registration and a lapse of insurance; if the lapse exceeds 90 days, the owner’s driver’s license will be suspended.
- In order to register a car and obtain a license in New York you must either purchase an automobile liability insurance policy from a licensed insurer or provide a minimum acceptable proof of financial responsibility.
New York: a no-fault state and how that affects you
New York is considered a no-fault state. In a no-fault state, in the event of a car crash and regardless of who is at fault, each person’s insurance covers their own injuries.
Rental car coverage
If you are a New York auto insurance policyholder and are renting a vehicle for thirty days or less anywhere in the U.S., its territories and possessions or Canada, you are not required to purchase Collection Damage Waiver (CDW) or Optional Vehicle Protection (OVP). At present, CDW/OVP coverage is currently provided without any extra charge by the rental company.
When renting a vehicle, New York auto insurance liability insurance policyholders are covered under their insurance policy for both bodily injury and property damage liability. It’s important to note that this coverage is provided on an “excess” basis. This means that your auto insurance coverage will protect you if the costs of damages is higher than the auto insurance covered by the rental car company.
New York State Cancellation Law
This law does not allow any car insurance companies to cancel your auto insurance coverage mid-term if your policy has been enforced for at least 60 days. The insurance company however can cancel your auto insurance policy mid-term if:
- your driver’s license has been revoked
- the driver’s license of any person insured under your policy has been suspended
- there is a discovery of fraud or material misrepresentation
Insurance Information Institute www.iii.org