New York Car Insurance Laws

First, let’s start with the minimum coverage you need to drive in New York legally.

Car Insurance Requirements in New York

The minimum liability insurance coverage required for car insurance in New York includes the following:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $50,000 for death per person
• $100,000 for death per accident
• $10,000 for property damage coverage per accident¹
• $25,000 for uninsured motorist coverage/underinsured motorist coverage per person
• $50,000 for uninsured motorist coverage/underinsured motorist coverage per accident
• $50,000 in personal injury protection per person²

Personal injury protection (PIP) includes coverage for:

• Medical expenses
• Rehabilitation expenses
• 80 percent of lost wages, up to $2,000 per month for three years from the accident date
• A maximum of $25 per day for other reasonable or necessary expenses, like household help, transportation to and from medical treatment, etc.
• Death ($2,000)

Penalties for Lacking Insurance

If you’re caught driving without insurance in New York, it’s a traffic infraction punishable by a fine of $150 to $1,500, imprisonment for up to 15 days, or both. Your license will be revoked until your hearing, and you’ll have to pay a civil penalty of $750 on top of the infraction fine.³ Perhaps these penalties are the reason why only 4 percent of New Yorkers lack insurance, compared to a 12 percent national average.⁴

No-Fault System

New York has a no-fault system, which means that if someone hits your car, they will pay for your property damages with their property damage liability coverage. However, you will pay for your and your passengers’ injuries, lost wages, and childcare costs with PIP.

Since the state has pure comparative negligence laws, accident victims can recover money regardless of their percentage of fault; your collective damages can even be higher than the other party’s.

More Insurance-Related Laws

Now that you’ve learned the basics of New York insurance, let’s get into some special cases:

• Self-insurance: Self-insurance is allowed in New York as long as you meet the somewhat complicated financial requirements involving your liquidity, number of tow trucks and other vehicles, and the average amount of your claims over the past four years. To see the exact requirements, check with your local Department of Motor Vehicles (DMV).
• Defensive driving course: If you have 11 or more points on your driving record and want a four-point reduction, you can take a defensive driving course. Completing such a course will also net you a three-year auto insurance discount of 10 percent. Courses are five hours and 20 minutes long, and the cost varies by provider. Find a course near you via https://dmv.ny.gov/pirp/classroom.
• Cancellation and non-renewals: An insurance company must notify you before it cancels your policy mid-term or if it decides not to renew it at the end of its term. You have a 20-day window to find new insurance before your policy expires for cancellations, but it’s only 15 days if the cancellation is due to nonpayment of premium. For non-renewals, that window is 45 to 60 days.

New York’s minimum coverage is already pretty extensive, but to get full-coverage insurance, you’ll need to add on collision and comprehensive coverage. We’ve also thrown in a few add-ons that you may want to consider too.

Collision Coverage

What if you cause an accident and your car needs to be repaired or replaced? Or, if you didn’t cause the accident, what if the at-fault party’s property damage liability coverage isn’t sufficient to cover your losses?

Meet collision insurance, which pays for your property damages regardless of fault. While it’s not required, we recommend collision coverage for all cars that are relatively new. If you need to use this coverage, you’ll pay a deductible, and then your insurance provider will cover the remainder of your car’s actual cash value or repair cost.

Comprehensive Coverage

Comprehensive coverage similarly pays for your property damages, but for causes other than collisions, such as:

• Vandalism
• Auto theft
• Inclement weather, like hail, hurricanes, tornadoes, sinkholes, etc.

We recommend getting comprehensive coverage, but not if you have an older car, as your insurance deductible may be not much less than your car’s market value.

Optional Basic Economic Loss

Optional basic economic loss (OBEL) is an add-on to PIP that would pay for expenses up to $25,000 for you, your passengers, family members, or any pedestrians injured in a car accident. The four options for OBEL coverage are as follows:

1. Basic economic loss (healthcare costs, loss of earnings, or other necessary and reasonable expenses)
2. Loss of earnings
3. Physical or occupational therapy and rehabilitation or psychiatric care
4. A combination of two and three

Supplemental Spousal Liability Coverage

Insurers must also offer you supplemental spousal liability (SSL) coverage, which would cover bodily injury coverage for your insured spouse and ensure they can sue for both economic and non-economic losses from a serious injury, like pain and suffering.

Rental Car Reimbursement

Second to Washington, D.C., New York has the lowest percentage of car commuters in the U.S. Only 55 percent of New Yorkers commute by personal car, while 17 percent take public transportation, 20 percent work from home, and the rest either walk, bicycle, motorcycle, take a taxi, or use other means.⁵

That said, 55 percent is still the majority, and if you’re in that majority, you’ll likely need a replacement car if yours is being repaired under a covered claim. With rental car reimbursement, your insurance company would give you money for a rental vehicle during the repair time.

Roadside Assistance

Many insurance companies offer roadside assistance if you’re stuck on the side of the road and need lockout services, a tow, fuel delivery, or other services.

Looking for cheap New York car insurance? You may have trouble, as insurance costs in the Empire State are the second highest in the nation after Louisiana. Here are the average annual costs based on the National Association of Insurance Commissioners’ latest data:

• Overall cost: $1,555
• Liability coverage: $923, the third most expensive in the U.S.
• Collision coverage: $455, the fifth most expensive in the U.S.
• Comprehensive coverage: $177, around the average U.S. cost of $174⁶

Factors That Affect Rates

Insurance companies in New York can base pricing on demographic factors like your credit score, age, and sex,⁷ as well as your ZIP code, as that indicates the crime rates in your area. New York’s auto theft rate is the sixth lowest in the nation, with only 102 thefts per 100,000 inhabitants, per the latest FBI data.⁸ However, that rate varies widely based on which metropolitan statistical area (MSA) you’re in.

• Ithaca: 29
• New York City-Newark-Jersey City: 118
• Rochester: 134
• Syracuse: 147
• Buffalo-Cheektowaga: 229

Of course, the prevalence of auto theft in your area is just one example of how your ZIP code can affect your insurance costs. There are also aspects, like your ZIP code’s population density, accident rate, and vandalism, that play a role too. Aside from your ZIP code, the type of car you drive also matters, as well as your driving history. That’s why insurance is never one-size-fits-all, especially in a state as diverse as New York. Your premium will depend on your specific driver profile.

If you’re the owner of a vehicle registered in New York, you may already know you’re required to do a safety inspection every 12 months or whenever you transfer ownership. This safety inspection also includes an emissions inspection or diesel emissions inspection, and you must go to an inspection station that the DMV has licensed to fulfill this requirement.

Find a station at https://process.dmv.ny.gov/FacilityLookup/. Fees range from $6 to $27 per inspection, depending on your vehicle.

New York bans all drivers from using handheld electronic devices while driving. The fines for texting and driving in New York, plus other penalties for breaking this rule, are as follows.

For violations committed after June 1, 2013, you also get five points added to your driving record. If you have received six or more points on your record within an 18-month period for crimes in either New York, Ontario, or Quebec, you’ll also have to pay a driver responsibility assessment fee.

If you don’t pay this fee, the DMV will suspend your driver’s license or learner’s permit.

New York vehicle registration requires insurance, so auto insurance is one of the first things you should think about when you buy a car. Especially if you’re in a densely populated area like New York City, car insurance will protect you and your passengers financially, whether you cause an accident or are involved in one.