What does New York’s no-fault system require, and where can drivers find the cheapest car insurance in New York?

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Welcome to New York, where the lights are bright and the streets are busy. Whether you live in the Big Apple or anywhere else within the Empire State, you will need car insurance if you plan to own a car and drive legally. But what coverage do you need to avoid New York’s excessive fines, and how can you save some money on the unusually high insurance rates? Luckily for you, we did all the research on New York car insurance so you don’t have to.

In this article:

Car Insurance Basics And Why Insurance Varies By State

Each state has its own car insurance laws and regulates insurance rates differently. A specific department within each state sets the minimum coverage level required to drive legally. It also decides how insurance companies can assess risk and determine pricing for state residents. This allows the state to set regulations and coverage requirements that fit the general population.

Overall, though, each state requires some combination of these five basic types of car insurance:

Insurance Type What It Does Range Of State Minimums
Bodily Injury Liability (BI) Covers another person’s injuries when you’re at fault

$15,000–$50,000/person

$30,000–$100,000/accident

Property Damage Liability (PD) Covers others’ property when you’re at fault $5,000–$25,000/accident
Uninsured Motorist BI Covers your injuries if an at-fault driver is not insured

$20,000–$50,000/person 

$40,000–$100,000/accident

Uninsured Motorist PD Covers your car if an at-fault driver is not insured $5,000–$25,000/accident
Personal Injury Protection (PIP) and Medical Payments Covers your injuries and your passengers’ injuries $1,000–$50,000
 

 

Numerous factors determine why each state sets specific minimum coverage requirements. General geography and road conditions play a role, as well as accident rates and other driver demographics within the state. Also, just because your state requires specific minimum coverage, that doesn’t mean you can’t obtain more coverage. In fact, you may need additional coverage if you’re driving a lease or if your car is still under loan.

About New York’s No-Fault Laws

New York and 11 other states follow a no-fault system for car accidents. Essentially, this means that your insurance company covers your damages in the case of an auto accident, regardless of who is at fault. There are some exceptions in cases of serious injury, but for the most part, each driver’s insurance pays for their injuries and damages.

The no-fault system in New York was put in place to avoid personal injury lawsuits. It reduces litigation and claims and even makes auto insurance less expensive for everyone. Therefore, all drivers in New York are required to carry a minimum of $50,000 in personal injury protection to cover their own medical expenses in the case of an accident.

New York Car Insurance Requirements

Because of the no-fault system and other laws in New York, drivers must carry the following car insurance:

Insurance Type Required Coverage Amount
Bodily Injury Liability $25,000/person and $50,000/accident
Wrongful Death Coverage $50,000/person and $100,000/accident
Property Damage Liability $10,000/accident
Personal Injury Protection $50,000/accident
Uninsured Motorist Bodily Injury $25,000/person and $50,000/accident
Uninsured Motorist Property Damage Optional
Collision and Comprehensive Optional
 

New York Auto Insurance Information And Enforcement System

As we previously mentioned, New York requires that all drivers maintain auto insurance coverage on a continuous basis. New York’s Department of Motor Vehicles (DMV) has a system in place called the Insurance Information and Enforcement System (IIES). Essentially, IIES detects uninsured vehicles.

Insurance companies are required to formally submit insurance information – including cancellations, renewals, and issuance of new policies – for all New York citizens they insure. The DMV then maintains this information in an electronic database and continuously tracks insurance coverage for each vehicle registered with the state. 

Sometimes the DMV will contact registered vehicle owners to verify insurance coverage. It’s important that drivers respond promptly, even if their vehicle is insured. Failure to maintain the minimally required New York car insurance can result in suspension of driver’s license or vehicle registration, not to mention monetary penalties.

Non-Insured Motorist Penalties In New York

Due to New York’s no-fault laws, it’s illegal for New York residents to drive without insurance or even have somebody else operate their vehicle without insurance. Penalties for driving without New York auto insurance include:

  • Revocation your driver’s license and vehicle registration for at least one year
  • A $750 civil penalty that must be paid to the DMV
  • Traffic court fines of as much as $1,500

Best New York Auto Insurance Companies

With over 50 choices for your New York car insurance, it’s hard to know which company will provide you with the best coverage and cheapest auto insurance rates. However, we recently researched many of the top car insurance companies across the nation. Based on our findings, we recommend the following choices for the cheapest car insurance in New York.

Geico

Geico’s well-known slogan – “15 minutes could save you 15 percent or more on car insurance” – can prove true for New York drivers. In our research, we found that Geico rates are some of the lowest in the state for nearly all drivers regardless of credit score and other factors.

Best Company Overall

★★★★★

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Our 2nd favorite and best for those ineligible for USAA: Offers competitive pricing and great coverage.

 

In addition to saving drivers money, Geico provides 24/7 customer service through its smartphone app and website. This can be great for drivers in the Empire State who find themselves needing to file a claim or access their coverage on late nights or weekends.

In terms of coverage, Geico offers:

  • Bodily injury and property damage liability
  • Collision and comprehensive
  • Uninsured and underinsured motorist
  • Medical payments and personal injury protection
  • Guaranteed Asset Protection (GAP) insurance
  • Mechanical breakdown insurance
  • Rideshare insurance
  • Emergency roadside services
  • Rental car reimbursement

Geico also has a variety of discounts, including discounts for federal employees, active-duty military, safe drivers, and safe vehicles. Since Geico offers homeowners and life insurance as well, you can bundle your insurance policies and save more with a multi-policy discount.

Geico has high ratings across the board from professional agencies. It maintains an A+ rating from the Better Business Bureau (BBB) and an A++ rating in financial strength from AM Best.

State Farm

State Farm has been around since 1922. Today, the provider is a national leader for auto and other insurance needs, and its reputation speaks for itself.

Most Popular Car Insurer in the U.S.

★★★★★

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Our 4th pick: Most popular auto insurance company that services over 83 million policies.

 

For auto insurance coverage, State Farm offers all basic types of coverage, plus rideshare insurance in most states. Although State Farm’s rates might not be as low as Geico’s, the company has a wide variety of discounts available to customers and great perks. Insurance quotes are available online, and a well-designed mobile app provides 24/7 access to your policy.

State Farm has an A+ BBB rating and an A+ rating in financial strength from AM Best.

Travelers Insurance

Travelers may not be as well known as Geico or State Farm, but the company is a big player in the auto insurance industry. Like it’s competition, it has an A+ rating with the BBB and an A++ rating from AM Best. J.D. Power reports low overall customer satisfaction with Travelers in regions like the Mid-Atlantic and Florida, but New York customers in the same study gave the provider a rating of 4 out of 5 – so it would seem that location is an important factor when going with this company.

Strong Financial Position

★★★★☆

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A solid choice for some motorists: You can rest assured the company will be around, though the coverage options aren't the cheapest on the market.

 

Along with basic coverage, you can receive the following through Travelers:

  • Roadside assistance
  • Rental car reimbursement
  • GAP insurance
  • New car replacement

Quotes are available online and by phone, but Travelers primarily works through independent agents. That can be a perk for drivers who want to form a personal connection with one agent.

New York Car Insurance Rates

New York car insurance ranks among the most expensive in the country. Experts say this is mostly due to the state’s population and median income. According to the National Association of Insurance Commissioners (NAIC), average insurance rates in New York in 2016 made it the third most expensive state for car insurance.

Here’s a breakdown of average coverage costs for New York car insurance that year:

Type Of Coverage Average Expenditures in 2016
Liability coverage  $840.00
Collision coverage $414.27
Comprehensive coverage $178.10
Total cost $1,301.64
 

*To calculate average expenditures, NAIC assumed that all insured vehicles would carry liability coverage but not necessarily collision or comprehensive. Total cost per year measures what consumers actually spent.

These rates are even higher in New York City, which is the most populated city in the nation. As a result, NYC car insurance rates are are also some of the highest among cities across the nation. In Brooklyn and boroughs of New York City, drivers can pay as much as $4,000 annually for insurance.

Other Factors That Impact New York Car Insurance Rates

Although population plays a major role in insurance rates, here are some other things that impact prices:

  • Time in Congested Traffic: New York drivers may only average 11,871 miles on the road per year, but they spend an average of 92 hours in traffic per year. In fact, New Yorkers have the fourth longest commute times in the country based on duration in hours.
  • High Accident Rates: New York City drivers are 20 percent more likely to end up in an auto accident than the national average.
  • Weather Conditions: New York’s climate and average weather conditions play a major part in road conditions and, therefore, impact car insurance rates. It rains and snows often in New York, with an average of 121 days of precipitation per year.
  • Road Conditions: According to a study by TRIP, 46 percent of major locally and state-maintained roads in the New York/Newark/Jersey City area are in poor condition, and another 23 percent are in mediocre condition. These roads can cost drivers in extra vehicle operating costs and higher insurance rates.

How To Get The Cheapest Car Insurance In N.Y.

When shopping around for competitive insurance rates, always keep the following in mind:

Don’t Assume Anything

Just because your friend in another state gets a good rate with one insurance company doesn’t mean you will. Rates vary widely by state due to coverage requirements and driving statistics. Therefore, the best company in Texas may not offer the best car insurance in New York.

Also, don’t assume that notable national brands will have the lowest rates either. Always compare rates between multiple providers, including some local or regional insurance companies, to ensure you receive the best rate based on your driving record and specific car.

Find Ways To Cut Costs

Even with the minimum required New York car insurance, you can find creative ways to save on insurance rates. For example, you can opt for higher deductibles to shave some money off the premium. You can also drop collision and comprehensive coverage as your vehicle ages and the rates exceed the possible payout. Ask about discount offerings, too, when shopping around for the cheapest car insurance. You may find that one company’s quote comes in higher, but the discount offerings lower the rate significantly.

Look Into Mileage-Based Policies

If you’re a relatively safe driver who doesn’t log excessive miles on your car, consider an insurance company that offers pay-per-mile plans. By electing this type of policy, you give your provider permission to track your driving habits. In return you receive discounted rates based on the amount of miles you actually drive and how safely you operate your vehicle when on the road.

Final Thoughts On New York Car Insurance

New York operates under a no-fault system. As a result, the state requires more coverage than other parts of the country. With the Insurance Information and Enforcement System, however, drivers can face steep punishments for driving without insurance.

Although the Empire State has some of the highest insurance rates in the country, save drivers who are willing to shop around can obtain quotes that will help them get the cheapest car insurance in New York. Consider our tips to maintain the best rates on your New York car insurance policy.

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