How Much Auto Insurance Coverage Should I Get? What Should My Limits Be?
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A car accident can have a profound impact on your life. Loss of your sweet ride is nothing compared to the serious damage to your body that can result from a crash. Accidents can cause a long-lasting, detrimental effect on your ability to work, which could torpedo your entire financial future. This is why it is important to have adequate car insurance coverage.
Below, we outline the minimum car insurance requirements mandated by New York State. We would, however, recommend saving money by shopping around and comparing quotes rather than cutting back on coverage. You never know when you will need to file an insurance claim, so it’s better to be safely covered than sorry you didn’t buy enough!
In case you were in doubt, you need the state minimum automobile liability insurance to even register a vehicle in the state of New York. If you let your coverage lapse, the DMV can and will suspend both your registration and your license. Therefore, the question arises of how much coverage is enough? The state requires you to have a minimum amount of liability coverage from a state licensed insurance broker. Out-of-State insurance is unacceptable. Here are the minimum amounts for liability coverage required by the state:
- $10,000 for property damage coverage (PDL) from a single accident
- Bodily injury coverage (BIL) of $25,000 per person and $50,000 for all persons injured
- Death coverage of $50,000 per person killed in an accident and $100,000 for all persons killed in an accident
- No Fault coverage of $50,000
In addition, your insurance must be up to date and remain in effect as long as your registration is valid (even if your vehicle is in storage). The name of the registrant must also be the same name on the insurance documents. Remember than you can also never put out-of-state insurance on a vehicle registered in New York State.
Before choosing the bare minimum and flying by the seat of your pants, let’s take the time to review the different types of coverage so we can ensure you are properly covered from the costs of an accident, whether it is or is not your fault.
Types of Auto Insurance
If a claim for damages or compensation from loss or injury due to negligence is brought against you, your liability coverage is what will pay for damages. Your insurance company defends you and pays the party that filed the claim against you up to your coverage level (hopefully it is enough). Liability coverage is not only required by law, but it is important to have so you don’t have to pay out of pocket.
This type of liability coverage protects you if your vehicle does damage to another person’s property. Like all types of liability coverage, carrying enough of this coverage can prevent you from having to pay for repairs or replacing property in addition to protecting your assets from seizure in a lawsuit. NYS requires $10,000 in PDL coverage. To be on the safe side, we recommend $50,000 in coverage.
If you injure another person in an automobile accident, your liability coverage, specifically bodily injury liability coverage, will pay for their medical bills. As stated above, NYS requires $25,000 coverage per person and $50,000 per accident. To be on the safe side, we recommend $100,000 in coverage per person and $300,000 per accident.
This coverage protects you if you are involved in a hit-and-run accident or a wreck with an uninsured/underinsured driver. These drivers often flee the scene because they either don’t have insurance coverage, or their coverage isn’t enough to pay for the damages. New York insurance law require insurance policies to have bodily injury uninsured/underinsured motorist coverage at the same minimums as bodily injury liability coverage ($25,000/$50,000).
No-fault insurance, often confused with personal injury protection, can cover medical expenses, lost wages, and other costs for occupants of the insured vehicle (regardless of who caused the accident). A no-fault claim is filed separately from a liability claim. It’s important to note that operating your vehicle while intoxicated will disqualify you from no-fault coverage.
What if I am Injured by an Uninsured Vehicle?
Uninsured motorist (UM) coverage, as explained above, protects you, your family, and the occupants of your car in the event they are injured in an accident with an uninsured driver. It protects you either from a negligent person driving an uninsured vehicle or a hit-and-run. A claim can also be filed under this coverage if a member of your family is injured while an occupant in an uninsured vehicle. (The injured party need not own a vehicle so long as a family member in the household does and has this type of coverage.)
Before opting-out of this type of coverage, you should consider that according to the NYPD in 2017, New York City saw 46,000 hit-and-run incidents, with just over 5,000 of those involving injuries to people. The rest were damage to cars and other property. More can be learned about the dangers uninsured motorists pose, here.
Comprehensive Coverage and Collision Coverage
Although it’s possible under the state’s regulations to only have liability coverage, you need to understand if you are in an accident and you have damaged another vehicle, your liability coverage will not help pay to repair your car. Collision coverage, another type of auto insurance coverage, will pay to fix damages to your own vehicle after an accident. Without collision coverage, you will need to pay out-of-pocket to get your car back on the road again. Depending on the age of your vehicle this could end up costing a lot more than your vehicle is even worth. Usually with collision coverage, you pay the first deductible amount and your policy covers the rest.
Another type of auto insurance coverage, comprehensive coverage, will pay for damage to your vehicle caused by non-collisions. Things that a comprehensive policy can cover include storm damage, flooding damage, fire damage, damage from animals, theft, and vandalism. In a state with erratic weather, such as New York, where crazy winter weather and hurricanes are the norm, comprehensive coverage is strongly recommended.
Unlike liability coverage, which you can buy in the six and seven figure amounts, comprehensive and collision coverage tend to max out at the actual cash value (ACV) of your vehicle. This means you can’t buy more coverage than your vehicle is actually worth. Unless you drive an older vehicle worth less than a couple thousand dollars, we recommend that all drivers in New York State buy both comprehensive and collision coverage.