New York, New York, the largest city in America is plagued by traffic congestion, but is only the 4th most congested city in the US. However, with very low highway fatalities, in the bottom three for uninsured drivers and one of the world’s best mass transit systems, it all equals a much lower insurance cost than most other states.
No Fault Insurance
As only 1 of 12 states that follow a No Fault insurance system, many drivers from other states may not be aware of the no fault system. In a no fault system, in the vast majority of cases you turn to your own insurer no matter who is at fault. So if you were involved in an accident where you were rear-ended and needed medical attention for minor injuries you would not be able to sue the “at fault” driver. You would simply file a claim with your own insurance. In this type of system, the majority of cases never go to court and can lower insurance costs because court costs are a lot lower.
However, there is a rising trend in some no fault states where “staged” accidents are on the rise, and can therefore lead to increasing no fault premiums. However, so far in New York this is not the case as the insurance rates in the state are much lower than the national average. This can be due to a number of factors including the mass transit in New York, lower fatalities and the sheer volume of insurance business in the state.
Yet there is a way to go outside the “no fault” system if you have been grievously injured over the state’s threshold. In this instance you would be able to recover additional costs for property damage and medical costs over and above your own insurance coverage by litigating the party at fault. In order to step outside the no fault system you need to have suffered one of the following injuries:
- bone fracture
- disability for 90 days or more
- limited use of a body function or system
- severe disfigurement
- or permanent limitation of a limb, organ or bodily member.
For any of these injurious situations you can pursue damages in civil court against the at fault party.
Insurance is Required
The State of New York requires auto insurance coverage for the registration of any vehicle in the state. The insurance required includes the Personal Injury Protection (PIP) as a part of the no fault system.
You must have the following coverages:
$25k per person PIP
$50k per person wrongful death coverage
$50k per accident PIP
$100k per accident wrongful death coverage
$10k per accident for property damage
$25k per person/$50k per accident Uninsured/Underinsured coverage
These minimum coverages are quite high for auto insurance and may help to explain the relatively low insurance rates as these amounts would cover a large majority of accidents in the state.
This insurance coverage under the no fault system covers accident related expenses, 80% of lost income with a limit of $2k per month up to 3 years and a $2k death benefit on top of the $50k coverage.
The minimums above do not cover all auto incidents. Getting optional coverages like collision and comprehensive will cover your own vehicle damages in an accident, while comprehensive will cover you against theft and vandalism. These optional coverages can often save you from financial ruin.
NY Insurance Penalties
If you do not have insurance you must surrender your vehicle registration immediately. If your insurance lapses for longer than 90 days and you have not also surrendered your vehicles license plates you will also be subject to a license suspension by the New York DMV. You can avoid the license suspension if you pay a fine for not surrendering your vehicle’s plates.
Learn about the insurance system in New York before making your decision on what coverage to get.