New York is home to big-city traffic, a no-fault insurance system and a lot of car insurance fraud. So, it’s no surprise that New York residents pay 20 percent more than the national average for car insurance. The good news is that there is a way to save hundreds of dollars a year on your car insurance. All it takes is a little research and a little time to collect quotes.
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Insurance policies are based on a lot of personalized information, so there’s no way to say one company is the best for every driver. Each provider has its own formula for calculating rates and each one weighs your data — such as 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. Aim to obtain at least five.
Online quotes should take about five minutes each, and most of the information you’ll need is stuff you know, such as your name, date of birth and your ZIP code. If you can’t remember the details of any recent accidents or you don’t know your average annual mileage, you should look that up beforehand. If you prefer to get your quotes over the phone, expect to add 10 or 15 minutes to the process.
Our Top 5 Picks for the Best Cheap Car Insurance in New York
J.D. Power is one of the best-known customer satisfaction reporting agencies in the world, and A.M. Best is the leading resource for rating a company’s long-term stability and ability to meet its future financial obligations. These factors are just as important as a low price. You want a company that makes the claims process easy and efficient and when it’s time to pay out, has the resources to do so and doesn’t drag its feet. That’s a headache that no one wants or deserves.
New York’s Minimum Coverage Requirements for 2020
The New York Department of Motor Vehicles requires its drivers to carry $25,000 of coverage for the bodily injury of someone in an accident and $50,000 for the death of one person in an accident. Drivers also must have coverage 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.
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Should I get more than the minimum required coverage?
The average driver will have an accident every 17.9 years. Most people won’t have enough insurance to protect their personal savings if they have only minimum coverage. The average cost of a nonfatal but disabling car-accident injury is $93,800, according to the National Safety Council. It makes sense to sign up for a policy that covers at least that much.
If a driver has only the minimum coverage and has a costly accident, they’ll be in trouble. Despite New York’s no-fault system, victims can sue for damages if another driver causes them a serious injury. If you get the minimum coverage, your insurance might cover only $25,000 (for example), and that’d leave you with nearly $70,000 to pay out of pocket. It’s safe to say that you probably have better plans for your savings account than getting wiped out by a bad bet on cheap car insurance.
If you’d chosen higher coverage limits in the beginning — say $100,000/$200,000/$100,000 — it would cost you a small amount more per year, about $50. In the event of a costly accident, you wouldn’t have to worry about paying anything out of pocket. Over the course of 18 years, that’s only an extra $900. And since you’re statistically likely to have at least one accident during that time, it makes sense to upgrade rather than risk being liable for tens of thousands of dollars in damages.
Being a New York resident, you should consider collision coverage and comprehensive protection for your vehicle, as well. Collision coverage pays for repairs to your car following an accident with another vehicle, even if it was your fault. Comprehensive coverage pays for damages not related to collisions, including natural disasters. Both of these coverages are worthwhile to city dwellers, who live where traffic is dense and the risks of theft and vandalism are higher.
What happens if I skip coverage?
New York requires you to provide proof of insurance when you register your vehicle or get a new policy. If you let your car insurance lapse, you’re looking at anything from fines to suspension of your license. If the lapse is fewer than 90 days, you may get off with just a fine, although it could 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 $750 to reinstate it after the suspension is up. You’ll also be required to file an SR-22 certificate with the state to keep your license. Of course, if you don’t have insurance and you’re at fault in an accident, you’re liable for all of the damages.
Why are New York’s rates so high?
New York is one of 12 states in the country with a no-fault car insurance system. This means your insurance will 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 seriously injured or disabled, however. This approach was designed to lower insurance rates, but studies have shown it’s 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 car insurance fraud. Insurance companies are interested in running a profitable business, so when they know there’s a risk, they 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 — which could occur if the state’s insurers don’t believe you can be insured at a reasonable profit — you’ll be assigned to the New York Automobile Insurance Plan (NYAIP). This is usually a direct result of someone having a poor driving record, little to no prior driving experience or having filed a lot 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 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 get quotes on the open market and find a new policy at any time.
Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years
A lot of car 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, but you’ll start doubting their value once you learn about a practice 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 cellphone carrier, and even your social media posts) to determine how likely you are to leave them for a better deal. About half of all large insurance companies use this tactic. Essentially, it means that loyal customers are going to get taken advantage of. If a company thinks you’re not going to shop around, it will gradually raise your rates over time.
To prevent paying more than you have to, get into the habit of shopping for a new policy with other car insurance companies 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. Second, your insurer really doesn’t want to lose your business, so even if it has to charge you less to keep you from switching to another provider, it’s a win for the insurer.
In the past few years, 15 states have banned price optimization because they believe it unfairly discriminates against certain consumers, especially those who are loyal to a certain provider. Unfortunately, New York has yet to make an official statement on the matter, but it is investigating the practice. Until there’s action on the state level, your best line of defense is to get online, use insurers’ quote tools and see what’s out there. Even if you like the company you’re with, it’s likely to lower your rate to match or beat a quote from the competition. And that doesn’t even take into account the fact that your rates are likely to drop as you age, as your credit score gets better and as your car ages. The dip in your riskiness as a driver should mean your rates will decrease over time.
There are dozens of factors affecting your insurance premiums, including where you live. Premiums in Rochester, New York, for example, are less than half the price of premiums in New York City. But fortunately, there is plenty you can do to lower your rate that doesn’t include moving to a different part of the state. For example, if you limit your driving to a few days a week, that could earn you a low-mileage discount. Young drivers and bad-credit drivers often face high premiums, but if you shop around instead of picking the first insurer you find, you can save, especially if you find a discount for being a good driver or a good student.
Try to purchase 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 car insurance policy is to get quotes and compare them. Check your quotes and see how much you can save.
Best Car Insurance in New York
- State Farm