Car Insurance in New York

I found $500 in savings in 30 minutes

New York is home to big-city traffic, a no-fault insurance system, and a lot of auto insurance fraud — all of which increase drivers’ overall risk in the eyes of insurers. So it should come as no surprise that New York residents pay 20 percent more than the national average on their premiums. The good news is, that the commercials are right: there’s a way to save hundreds of dollars a year on your auto insurance. All it takes is a little bit of research and a few minutes collecting quotes.

I got quotes for New York’s minimum coverage and found prices varied by up to $500 from one company to the next. GEICO turned out to be the cheapest for me, but it may not be for you. Insurance policies are based on a ton of personalized information, so there’s no way to say one company is the best hands-down. Each provider has its own formula for calculating rates based on those many risk factors and they each weigh things like the make and model of your car, your driving history, and where you live differently. The only way to know which company best suits your needs is to compare a bevy of quotes — and I would aim for at least five.

Online quotes should only take five minutes each and you should know most of the information already, such as your name and date of birth. If you can’t remember the details of any recent accidents or you don’t know your average annual mileage, though, you should look that up beforehand. I got all of my quotes online except for one; I was unable to get a Nationwide quote online and so I had to call them. If this happens to you, expect that to add about 10 or 15 minutes to the process. And while we I do recommend getting more than the minimum coverage, expect to get upsold when talking to a live agent. (In fact, some might not even let you apply for minimum coverage at all.) If you go in knowing the coverage type your looking for, and what you consider to be too much, it’ll make it that much easier to turn down the upsell.

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Our Top 5 Picks for the Best Car Insurance in New York

I started with quotes from these five companies and I’d recommend you start with them as well. They all have earned high financial solvency grades from A.M. Best and above-average customer satisfaction scores from J.D. Power.

Insurer My quote
GEICO $330
Allstate $538
State Farm $780
Travelers $824
Nationwide $1,243

J.D. Power is one of the best-known customer satisfaction reporting agencies in the world, and A.M. Best, though perhaps less well-known, is the leading resource for rating a company’s long-term stability — that is, the likelihood that they’ll be able to meet their financial obligations in the future. These factors are just as important, or even more important, as a low price. You want a company that makes the claims process as easy as possible, not one that drags their feet when it’s time to pay out. That’s a headache that no one wants, or deserves. For me, I’d rather pay a little bit more each year than risk getting into an accident and then working through a claims process with a company that’s not solvent enough to pay me.

After comparing the numbers, I found a $500 difference between my cheapest and most expensive quote. At $330, GEICO was easily the winner for me. Allstate, my next cheapest option, was still a good $200 behind. Somehow Travelers wanted to charge me nearly $500 more for the exact same coverage. Nationwide came out highest of all because I had to do the quote over the phone and the representative insisted on giving me much higher coverage limits — even when I tried to decline the coverage and get a quote for the most basic option, I was unsuccessful. It’s worth noting that if you manage to complete a quote online, Nationwide might turn out to be a bit more competitive.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

A lot of auto insurance companies don’t just consider your risk as a driver when they calculate your premium; they also consider your loyalty. You might be thinking about those loyalty discounts you may have on your policy. I used to think those were awesome, too, until I learned about a practice called called price optimization. It’s when a company uses big data to analyze your personal data (things like your shopping habits, how long you’ve been with your cell phone carrier, and even your social media posts) to determine how likely you are to leave them for a better deal. Only about half of all large insurance companies use this tactic, but essentially, it means that loyal customers are going to get taken advantage of. If a company thinks you’re not going to shop around, they’ll gradually raise your rates over time. It’s a lot like cooking a frog — it won’t jump out of gradually warming water, and it’ll be boiled before it knows it.

I recommend getting into the habit of shopping for new policy every year or two. First off, it shows the insurers you’re interested in finding the best deal and forces them to offer a more competitive rate. Secondly, your insurer really doesn’t want to lose your business, so even if they have to charge you less to keep you from switching to another provider, it’s a big win in their book.

There is active competition among auto insurers in New York State. Rates can vary considerably among insurers. The differences in rates are based, among other factors, on the specific experience of the particular group of insureds a company insures. Therefore, it is always a good idea to obtain quotes from several insurers. Consumers who shop get better value for their insurance dollar than those who do not. — New York Department of Financial Services

In the last couple years, 15 states have banned price optimization because they believe it unfairly discriminates against certain consumers — especially those that are loyal to a certain provider. Unfortunately, New York has yet to make an official statement on the matter, but it is currently investigating the practice. Until there’s action on the state level, your best line of defense is taking to the quote tool and seeing what’s out there. Even if you like the company you’re with, they’re likely to lower your rate to match or beat a quote from their competition. And, that doesn’t even take into account the fact that your rates are likely to drop as you mature, as your credit score gets stronger, and as your car ages. The dip in your riskiness as a driver might also mean your rates will decrease over time.

New York’s Minimum Coverage

The Bare Minimum

New York requires its drivers to carry $25,000 of coverage for the bodily injury of and $50,000 for the death of one person in an accident. Drivers must also have an additional cover for accidents with two or more people: $50,000 for bodily injury and $100,000 for death, plus $10,000 of property damage coverage. Uninsured motorist coverage is required as well, with a minimum of $25,000/$50,000.

The Best Car Insurance Isn’t Just Cheap Car Insurance

It’s astonishing to me to even think about signing up for the state minimum coverage. It’s been a long time since you could replace a car for only $10,000, and even a good smashing of a bumper or a rear quarter panel can set you back a few grand. I’m fairly certain that at some point in my driving lifetime, I’m going to be involved in an accident, and statistically, I’m right: The average driver will have an accident every 17.9 years. When that accident happens, I want to have enough coverage to protect my personal savings account. Since the average cost of a disabling, nonfatal accident is $80,700, that means I’m not going to sign up for a policy that’s anything less than $81,000. In fact, I feel more comfortable with a policy that’s closer to $100,000.

If I only have the minimum coverage and I’m unlucky enough to do that kind of damage to someone, I’m in big trouble. Despite New York’s no-fault system, victims can sue for damages if another driver causes them a serious injury. My insurance, if I get the bare minimum, will only cover its $25,000 and that’d leaves me with another $55,700 to pay out of pocket. I have bigger plans for my savings account than getting wiped out by a bad bet on cheap car insurance.

In the case of that same hypothetical accident, if I’d chosen higher coverage limits in the beginning — say $100,000/$200,000/$100,000 — I would only end up paying $42 more per year with GEICO and then, in the event of that costly accident, I wouldn’t have to worry about paying anything out of pocket. Over the course of 18 years, that’s only an extra $756. And since I’m likely to have at least one accident during that time, I’d rather upgrade than risk being liable for thousands upon thousands in damages.

Being a New York resident, you should consider collision and comprehensive protection for your vehicle as well. Collision coverage pays for repairs to your car following an accident with another driver, even if it was your fault. Comprehensive coverage pays for damages not related to collisions, including natural disasters. Both of these coverages are especially worthwhile to city dwellers, where traffic is rampant and the risks of theft and vandalism are often high. That is, unless your car is a hunk of junk, that you don’t mind getting dinged up or bashed about. (In my opinion that’s the only kind of car that makes sense to me, but just like our insurance quotes, we’re all different.)

If You Skip Coverage, It’ll Cost You

New York requires you to provide proof of insurance when you register your vehicle and any time you get a new policy. If you allow your auto insurance to lapse, you’re looking at anything from fines to suspension of your license. If the lapse is less than 90 days, you may be able to get off with just a fine — although that fine may be over $1,000. If the lapse is longer or if you’re involved in a crash while uninsured, your vehicle registration and license will be revoked for at least one year and you’ll have to pay an additional $750 to reinstate it after the suspension period is up. Of course, if you don’t have insurance and you’re at fault for an accident, you’re liable for all of the damages. Yikes.

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Beat the Average Premium: 9 Ways to Snag Cheap Car Insurance Rates

There are dozens of factors affecting your insurance premiums, including where you live. Premiums in Rochester, for example, are less than half the price of premiums in of NYC. But fortunately, there is plenty you can do to lower your rates that doesn’t include moving to a different part of the state. For example, I limit my driving to a few days a week and that usually earns me a low-mileage discount. Take a look at some of the other factors that raise and lower your rates.

Nine Ways to Lower Your Car Insurance Rates

FAQs

Why are New York’s rates so high?

What to Expect
Average Monthly Premiums
United States $139
New York $174
New York City $216
Hempstead $199
Mount Vernon $175
Yonkers $174
White Plains $144
New Rochelle $144
Buffalo $137
Niagara Falls $111
Utica $107
Syracuse $101
Schenectady $97
Albany $95
Rochester $94
Source: Quadrant

New York is one of twelve states in the country with a no-fault auto insurance system. This means it’s your insurance that’ll cover any injuries to you or your passengers as well as any damages to your vehicle, regardless of who was at fault in the accident. You can still sue the other driver if you’re left seriously injured or disabled, however. This approach was designed to lower insurance rates, but studies have shown it’s actually done the opposite. The no-fault system leads to insurers paying for more medical bills and they build that cost into their insurance premiums.

New York is also one of the leading states for auto insurance fraud, with nearly a quarter of all claims involving abuse. InsuranceFraud.org named the state a hot spot and Fraud is especially common in New York City; 35 percent of claims in the metro are likely to be fraudulent, whereas only 8 percent are fraudulent in the rest of the state. If we’re naming boroughs, Brooklyn and Queens carry a lot of the weight. Fifty-two percent of the apparently abusive claims in 2010 had their roots there, according to the Insurance Research Council. That same study found that fraud rates have gone up 70 percent in the last decade. To be sure, rates have climbed to match. Insurance companies are interested in running a profitable business, so when they know there’s a risk, they will alter their rates to accommodate it.

Why am I in the “assigned-risk” plan, why is it so expensive, and how do I get out of it?

If you can’t find an insurance company willing to insure you, you’ll be assigned to the New York Automobile Insurance Plan (NYAIP), which could occur if the state’s insurers don’t believe you can be insured at a reasonable profit. In general, it’s a direct result of on your poor driving records, having little or no prior driving experience, or having had a certain frequency of claims.

The rates for NYAIP policies are generally higher than typical market policies. They are calculated based on verifiable loss experience data — how risky the group of drivers is to insure. Since the loss experience for NYAIP drivers, as a group, is consistently worse than the losses and expenses of those in the voluntary market, their rates are also going to be higher. If you are currently insured under the NYAIP, your insurer is committed to insuring you for three years, but you’re free to go get quotes on the open market and find a new policy at any time.

The Bottom Line

I recommend purchasing more than the minimum coverage if you can. Even with New York’s no-fault policy, you can still be sued if you do serious damage, so higher coverage limits are always better. The only way to find your best auto insurance policy is to get quotes and compare them. Check your quotes and see how much you can save.

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