New York Car Insurance Laws

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New York State drivers are required by law to have auto insurance, and to abide by insurance laws, in order to drive legally in the state. New York’s insurance limits are higher than many states, but the minimum requirements may still not be enough to adequately protect you.

New York saw nearly 500,000 traffic accidents in 2019, with 881 fatalities. The average payout on claims was $6,360, but accidents with injuries can end up costing in the hundreds of thousands of dollars, and a robust insurance policy is your best protection against costly, out-of-pocket charges.

Car Insurance Laws in New York

New York is considered a no-fault state, which means that in addition to liability insurance, drivers need personal injury protection (PIP) coverage. The state also requires uninsured motorist coverage. Here is the full list of New York car insurance requirements:

  • $10,000 for property damage for a single accident
  • $25,000 for bodily injury for a single person in an accident
  • $50,000 for bodily injury per accident (if more than one person is injured)
  • $50,000 for personal injury protection (PIP)
  • $25,000 per person/$50,000 per accident for uninsured motorist bodily injury

Note that these are the minimum requirements which you must meet with your insurance policy. You may, however, purchase additional coverage for increased protection.

Your auto insurance gives you what is legally called Proof of Financial Responsibility. Your insurance card tells others that you are capable of paying for damages or injuries caused during an accident. When you present it after an accident, you are proving that you can take responsibility for costs incurred from the accident.

There is a little-known alternative that is also available, called an Alternative Proof of Financial Responsibility offered in some states. With this option, you satisfy the state’s requirements in an alternative manner and are issued a certificate that stands in place of your insurance ID card. The three options you have for doing so include:

  • Depositing $150,000 as security with the DMV which can be used to satisfy any claims made to you following an accident
  • Filing a surety bond with the DMV, which means that a surety company pays for claims and then collects the money from you
  • Self insurance, which only occurs when you own more than 25 vehicles and apply to become a self-insurer

According to the New York DMV, however, insurance is required. To determine whether you may be eligible for Alternative Proof of Financial Responsibility, you will need to contact your local DMV.

Liability Insurance in New York

Liability insurance is the portion of your insurance policy that pays for costs associated with injuries sustained by those in the other car in an accident, or for damage caused in an accident. Liability insurance in New York is often written as 25/50/10, indicating the minimum amount you need in order to drive legally in the state, as outlined above.

But is the minimum enough? If you are in a serious accident, the minimum may not cover all expenses. Consider the property liability portion, for which the minimum is $10,000. If the other driver’s car was totaled, and it was a fairly new or expensive vehicle, that $10K might not be nearly enough to replace the vehicle.

Or consider the bodily injury minimum, which is $25,000. If a passenger in the other car suffers serious injuries requiring hospitalization and surgery, that $25K could be used up rapidly.

Because of this, it is important to purchase as much liability insurance as you can reasonably afford. Many experts recommend that you consider at least 100/300 for bodily injury liability. This way, you are much less likely to be caught in a bad financial situation following an accident.

Is New York a No-Fault State?

Twelve states in the U.S. are considered no-fault states, and New York is one of them. New York no-fault laws state that you can make a claim on your own insurance policy following an accident, no matter who was at fault. So if another driver runs a red light and hits you, you would still make your claim to your own insurer, not the other drivers’ provider.

The portion of your policy that protects you in this case is called personal injury protection (PIP). PIP will cover your medical expenses, lost wages, funeral expenses, if needed, and some additional costs. PIP will pay up to $50,000 per person, with the option to raise it for an additional cost.

PIP is mandatory in New York State, as it is in all no-fault states. Driving without insurance New York will result in penalties and even jail time.

Penalties for Driving Without Insurance in New York

Driving without insurance in New York can result in serious consequences. Your insurance company is required to notify the DMV if your policy lapses. If you no longer have insurance, you must turn in your registration and license plates to the DMV and refrain from driving. If you do drive, you could face the following penalties:

  • Fines, which increase over time
  • Impounded vehicle
  • After 90 days, your driver’s license can be suspended
  • You can be arrested or ticketed

If you are driving without insurance and are in an accident in New York, your license and registration might be suspended for at least one year, and you could face fines as much as $1,500, along with a $750 civil penalty to restore your license.

Additional Auto Insurance Coverage Options in New York

In addition to the required liability, PIP and uninsured motorist coverage New York, there are other options for coverage you can include to be better protected. Costs vary depending on the insurer, as well as on the details of your car, and even your own driving skills.

  • Collision: this optional coverage helps pay for damages to your car following a crash with another car or cars or a stationary object. The only type of collision not covered here is if you hit an animal — which is covered under comprehensive coverage.
  • Comprehensive: often purchased along with collision, comprehensive covers you for all non-accident related mishaps, from a tree falling on your car in a wind storm to car theft or vandalism. It is not mandatory in New York State. Comprehensive and collision are good coverages to have if your car is newer or a high-end model. For older cars with less value, it may not be as important.
  • Medical payments: optional in New York, medpay coverage will augment your other coverages, such as PIP, and help pay for medical costs incurred in an accident. These might include hospital stays, surgery, ambulance costs or other medical expenses.
  • Gap coverage: If you owe on a car loan and your car is stolen or totaled, this option will help pay off the loan. Your collision or comprehensive will pay, first of all, for the depreciated value of the car. But if your loan is higher than that, gap coverage will pay the excess, so you have no out-of-pocket charges, other than a deductible.
  • New car replacement: if your car is totaled or stolen and is two years old or less (or for some insurers, one year old or less), new car replacement ensures that you will have enough to purchase a new car of the same value as your former car.
  • Roadside assistance/towing and labor coverage: similar to a membership with AAA or another roadside assistance company, this will cover the cost of repairs or towing if your car breaks down on the road, you run out of gas or you have a flat tire. You can use it if you need a jump-start, or if you are locked out of your car.
  • Rideshare: If you drive for a ridesharing company such as Uber or Lyft, you will want to include this coverage. Your personal car insurance policy does not normally cover your car if it is used for business; you will need this additional coverage option to be protected while driving for-hire.

Frequently Asked Questions

What is the best car insurance company?

The best car insurance company varies from person-to-person. Since there are many factors involved, the company that gives you the best prices may not do so for another driver. A good place to start your search is with our Best Car Insurance Companies for 2020 review.

What is financial responsibility?

Financial responsibility means being able to show that you have the money needed to make any repairs or pay for medical or legal costs following an accident. In New York State, you demonstrate your financial responsibility after an accident by presenting your insurance card to the police or the other driver.

How much liability insurance do I need?

New York State liability minimums are 25/50/10, but this minimum coverage may not be enough if you are involved in a serious accident. Experts recommend that you purchase as much insurance as you can afford — ideally bodily injury liability of $100,000/$300,000 and property damage of $50,000.

Written by
Mary Van Keuren
Insurance Contributor
Mary Van Keuren has written for insurance domains such as Bankrate.com, Coverage.com and Thesimpledollar.com for the past five years, specializing in home and auto insurance. She has also written extensively for consumer websites including reviews.com and myslumberyard.com. Prior to that, she worked as a writer in academia for several decades.