Types of Insurance
Last Updated on September 26, 2020
If you expect to drive a vehicle in the United States, auto insurance is a necessity. All states in the US legally require at least some form of auto insurance. New York State is no exception. If you want to get behind the wheel in the Empire State, you’re going to need auto insurance!
Types of Auto Insurance Coverage in New York
Whether you are a first-time driver, a teenager looking for information or are moving from another state to New York, you will need to know a bit about the types of auto insurance coverage available in New York. Below we will take a look at how auto insurance in NYS works, what types of policy are mandatory, and how much you will likely end up spending on insuring your car.
New York and No-Fault Insurance Laws
Auto insurance in the state of New York follows a “no-fault” system, which means that when an accident occurs, each driver’s insurance company will make payments for injury and damage claims instead of one driver having to sue the driver who caused the accident. The upside to this type of insurance is that it allows one to purchase as much – or as little – auto insurance coverage as they would like to have. The main downside is that New York’s no-fault insurance laws remove some of the right to sue other drivers for causing accidents or property damage. For this reason, nearly all auto insurance agents will recommend that drivers purchase more auto insurance than the mandatory minimum or more than they think they might need; this way, if an expensive accident occurs, the driver and passengers will be adequately covered.
New York’s Bodily Injury Liability Requirements
The most important type of required auto liability insurance in New York is known as Bodily Injury Liability insurance, and every driver must purchase coverage to be legally allowed to drive in the state. This coverage pays out to accident victims when the policyholder causes an accident and is intended to protect the policy holder’s financial assets so that car accidents aren’t causing drivers to go bankrupt.
BILL insurance also provides coverage against the costs of any lawsuits against the policyholder, as well as judgments that stem from the lawsuit. The mandatory minimum amount of BILL coverage is $25,000 per party and $50,000 for all parties in a single accident. However, it is common to see drivers raise this to around $100,000 and $300,000 respectively.
Personal Injury Protection Coverage is Required
Personal Injury Protection or “PIP” coverage is another of the more important types of auto insurance policy available for New York drivers and is worth contributing additional dollars to if there is room in your budget. PIP coverage pays for the costs of injuries sustained by the policyholder and their passengers in an accident, regardless of who was considered “at fault.” Most PIP policies will cover medical treatment costs, lost wages, and other reasonable expenses involved with the medical care or treatment of injured passengers. New York requires a minimum of $50,000 of PIP coverage, but this should be raised to $100,000 or more – especially if other family members are regularly in the vehicle.
Property Damage Liability Insurance in New York
Property Damage Liability Insurance is another of the required policies to be considered a fully insured driver in the state of New York. In essence, this coverage pays out to those whose property is damaged in an accident caused by the policyholder. For instance, if you are driving and hit a parked car, your PDL coverage is the insurance policy that will pay out to the owner of the parked vehicle to cover any repair costs. In New York, the mandatory minimum amount of PDL required is $10,000, which can quickly be exhausted in the event of a moderate or severe accident. It is common for drivers to purchase $50,000 or even $100,000 in Property Damage Liability insurance to have adequate coverage.
Uninsured Motorist Bodily Injury Liability Coverage
The final type of auto insurance that is required in New York is known as “Uninsured Motorist Bodily Injury Liability” coverage. This type of BIL coverage extends protection for the insurance policyholder and their passengers if they are in an accident with a driver that is either underinsured or has no insurance at all. The minimum amount of Uninsured Motorist Bodily Injury Liability insurance that a driver must have in New York is $25,000 per injured person and $50,000 for all parties in the same accident. Again, high treatment costs are associated with automobile accidents, so it’s best to get as much BIL coverage as you can reasonably afford – especially if children or other passengers are regularly in the vehicle. In New York, this type of insurance also covers hit-and-run accidents.
Other Types of Car Insurance in New York
While those listed above are the mandatory types of auto insurance in New York, several optional insurance policies can be purchased, which include:
- Collision Coverage – This pays for damage to the policy holder’s car in an accident
- Comprehensive Coverage – This coverage handles damage caused by fire, floods, animal impacts, vehicle theft and more, and is highly recommended
- Medical Payments Coverage – This provides additional coverage for medical expenses
- Roadside Assistance Coverage – This includes coverage for towing and other roadside services such as jump-starts and fuel refills
- Accidental Death and Dismemberment – this pays an additional amount in case a family member or passenger suffers a grievous injury or death in an accident.
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