What is the NY Auto Insurance Liability Rule?

New York Is a No-Fault Insurance State

New York operates under a no-fault system for car insurance coverage purposes, so Personal Injury Protection (PIP) coverage is required.

What kind of insurance do I need?

New York law requires that you have auto liability insurance coverage. The minimum amount of liability coverage is:

  • $10,000 for property damage for a single accident
  • $25,000 for bodily injury and $50,000 for death for a person involved in an auto insurance accident
  • $50,000 for bodily injury and $100,000 for death for two or more people in an auto insurance accident

New York also requires that you have no-fault coverage, which helps you with costs after an accident, regardless of who was at fault.

New York basic no-fault coverage includes a limit of $50,000 per person to cover:

  • Your accident-related medical expenses.
  • 80% of lost income because of injuries from a car accident, with a limit of $2,000 per month for up to 3 years.
  • Up to $25 a day for expenses such as household help (for up to 1 year from the accident).
  • A $2,000 death benefit on top of the $50,000 limit.

No-fault insurance covers your medical costs after an accident, before your health insurance. If your medical costs exceed your no-fault coverage limit, your health insurance will take over.

Your liability insurance coverage must remain in effect while the registration is valid, even if you don’t use the vehicle.

There are exceptions for motorcycles.

Out-of-state insurance is never acceptable. Insurance coverage is in the name of the vehicle registrant and must remain in the registrant’s name at all times.

The New York State Department of Financial Services website has more information about liability insurance and insurance companies licensed in New York:

Vehicle owners must buy Personal Injury Protection (PIP). This is the part of the policy which protects the policyholder, his or her family members and passengers while riding in the vehicle.

At least $50,000 in PIP must be bought, and customers can choose a policy which offers a higher level of protection if they wish.

Even though New York is a no-fault state for car insurance purposes, accident victims may sue to collect damages in certain circumstances. For this reason, drivers must buy liability coverage.

At least $10,000 in property damage liability coverage must also be bought. This is the part of the policy which pays for repairs to the other driver’s vehicle and any public property damaged or destroyed in the accident.

NY auto insurance requirements also include uninsured and underinsured motorist coverage. They pay out when the at-fault driver in an accident does not have coverage (uninsured motorist) or does not have enough insurance to pay for the damages caused (underinsured motorist coverage).

Proof of New York Auto Insurance

Since the DMV requires you to have a certain amount of vehicle insurance, you must provide proof that your vehicle is insured.

When you purchase insurance, your insurance company will give you two original New York State Insurance Identification cards.

Your insurance company will also send the DMV an electronic notice of insurance coverage.

The DMV requires both the electronic notice and an insurance card.

When you go to register your vehicle, you must bring one of your Insurance Identification cards with you – the DMV will keep this card on file.

You’ll want to keep your other NYS Insurance ID card in your vehicle, along with your registration slip.

You may be required to show it if you are stopped by a police officer for a traffic infraction.

You’ll also want to have your insurance information handy if you are involved in a traffic accident.

Your New York Number Plates and DMV

The NY auto insurance liability rule pertaining to plates is very simple. Drivers who do not have this necessary protection in place must turn in their plates to the Department of Motor Vehicles (DMV).

Follow these simple rules:

A driver who knows that his or her coverage will end shortly should remove the plates to the car and deliver them to the DMV before the policy ends.

When a driver has been notified by the DMV that his or her coverage has lapsed, it should not be ignored.

You must respond to the letter you receive from the DMV or surrender your license plates to prevent the suspension of your registration and driver license.

Contact the insurance company or broker immediately to request that proof of coverage be filed electronically with the DMV.

It’s a good idea to keep the car off the road until confirmation of the filing has been received.

Your registration and driver license are suspended indefinitely

If you had a lapse in insurance coverage and did not surrender your vehicle plates immediately, your registration is suspended for a period you did not have insurance coverage, but held the vehicle plates.

If the period is over 90 days, your driver license is also suspended for the same number of days as the registration.

To reinstate your driver’s license, you must pay a termination fee of $25 when the suspension ends. For a suspension with an effective date on or after July 6, 2009, the termination fee is $50.

You can prevent the suspension of your registration and driver license if you surrender your vehicle plates to the DMV before your liability insurance lapses.

You are not required to surrender your vehicle plates for a suspension of 90 days or shorter if you pay a civil penalty.

You cannot use the civil penalty option if the lapse is longer than 90 days or you used this option in the past 3 years.

The civil penalty amounts shown below are the amounts for suspensions that take effect on or after October 1, 2005. The civil penalty amount is:

  • $8 per day for each day of the lapse from day 1 through day 30
  • $10 per day for each day of the lapse from day 31 through day 60
  • $12 per day for each day of the lapse from day 61 through day 90

Over 2 names on a vehicle registration

There can only be 1 or 2 names on a registration (registrants). Both the primary registrant (first name listed on the registration) and the co-registrant must sign the Vehicle Registration/Title Application (PDF) (MV-82) and provide their proofs of identity and date of birth. Both names must appear on the Insurance ID Card.

Cheap Auto Insurance for Good Drivers in New York

Good drivers can save money on car insurance if you have no at-fault accidents, speeding tickets, or DUIs.

Insurance companies use your driving record to predict what kind of risk you will pose to them. So, by not having any of these violations you are less risky and therefore cheaper customer for them.

Besides having a cheaper premium, some companies offer a Good Driver discount. While the amount varies based on your company, it can range between 5-10%.

If we’re looking beyond just average rates and at individual companies, Nationwide seems to have the cheapest rates for excellent drivers.

New York Good Driver Discount

Available to policyholders if:

  • At least one of the key drivers on the policy has 5 years of driving experience
  • All covered drivers have been accident-free for five years leading up to the policy issue date, and
  • No drivers have any points assigned

This discount applies to Bodily Injury, Property Damage, Collision, and Personal Injury Protection coverages.

Auto Insurance for Young Drivers in New York

Inexperienced drivers, those between the ages of 16-25, pay the most for car insurance across the US.

Because of the risk presented by inexperienced drivers, teen drivers pay over three times the national average for car insurance.

For teen drivers, historically the most expensive drivers to insure, we’ve found that Geico, Progressive, and Liberty Mutual are the cheapest companies.

Car Insurance for Bad Drivers in New York

Having a poor driving record can be a tremendous burden for getting cheap car insurance – no matter your location.

In New York in 2017, a DUI raised rates an average of $1,208 a year. Other violations, such as an at-fault accident or a speeding ticket, will also hurt your driving record.

Based on our research, if you’ve had a DUI or at-fault accident, your best bet for cheap car insurance is to shop with Liberty Mutual, State Farm, or Nationwide.

New York Is a No-Fault Insurance State

New York Teen Driver Laws

If your teen is getting close to the driving age, you and your teen should know:

  • At age 16, people in New York become eligible for a learner permit. To receive the permit, drivers must pay the application fee and pass a written test.
  • The learner permit allows them to drive between 5:01 am and 8:59 pm with a parent, guardian or driving instructor and transport only one non-family member under age 21.
  • After six months with a learner permit and 50 hours of supervised driving (including 15 hours of night-time practice), a driver can test to receive a junior driver’s license.
  • Drivers who only have a junior license aren’t allowed to drive within the five boroughs of New York City, so it’s often beneficial to bypass the junior driver’s license until he or she qualifies for a senior license.
  • Outside of New York City, the junior license is valid with a series of curfew and passenger restrictions specific to each county.
  • Inexperienced drivers are eager to get out on the road and experience that kind of freedom for the first time.
  • To ensure safety on the road for everyone, it’s important to become familiar with the laws for new drivers in New York.

While certain steps are different between New York City and New York State, when a teenager turns 16, they can apply for a learner’s permit.

After having a learner’s permit for at least six months, teens may apply for a junior driver’s license, followed by an unrestricted license once they turn 17 years old.

At age 18 (or age 17 if the driver has completed a driver training course) drivers may apply for a senior driver’s license with no restrictions.

What is the difference between “cancellation” and “non-renewal” of a policy?

Under the Insurance Law, a personal automobile insurance policy must remain in effect for a required one year policy period.

  • If an insurer decides not to renew the policy at the expiration of this period, this is a “non-renewal.”
  • If the insurer ends the policy at any other time (which can only be done under limited circumstances), this is a “cancellation.”

My policy has been cancelled! Are They Allowed To Do This?

For any new personal automobile insurance policy, an insurer may cancel for any reason within the first 60 days subject to the insurer’s established underwriting guidelines, which are not required to be filed with the Department of Financial Services.

A policy can only be canceled in mid-term (after 60 days on a new policy) for a few specific reasons:

  • Suspension revocation of a driver’s license of the named insured or any other person who customarily operates an automobile insured under the policy (not including administrative suspensions)
  • Fraud or material misrepresentation in obtaining the policy or in making a claim
  • Non payment of premium.

Policies in the NYAIP (New York Automobile Insurance Plan a/k/a “assigned risk” plan), as discussed further in the section “Trouble Getting Coverage”, may be subject to certain additional criteria for cancellation.

No-Fault Benefits-Personal Injury Protection (PIP)

No-Fault, also called Personal Injury Protection (PIP), pays promptly, regardless of who is at fault or whether there was any negligence, for economic losses (meaning medical/health expenses, lost earnings, and certain other reasonable and necessary expenses related to injuries sustained), up to $50,000 per person (“basic No-Fault coverage”), to the driver and all passengers injured in your car and any pedestrians injured by your car, because of its use or operation in New York State.

The purpose of No-Fault insurance is to restore individuals’ hurt in auto accidents to health and productivity as swiftly as possible.

Because of New York’s No-Fault law, lawsuits for auto accidents can be brought only for economic losses that exceed No-Fault benefits and for non-economic damages (such as pain and suffering) only if a “serious injury” (as defined in the Insurance Law) is sustained.

  • No-Fault is a personal injury coverage and does not pay for auto body repair of your car or damage to any other party’s motor vehicle or other personal property.
  • No-Fault is also primary to health insurance, which means it pays first in the event injury is for an auto accident.

Under this coverage, your insurer provides you and all relatives who live in your household with protection against economic losses arising from injuries sustained in motor vehicle accidents anywhere within the United States, its territories and possessions, or Canada.

It also provides coverage for any passengers injured in accidents in New York State while in your vehicle, and any guest passengers who are New York State residents injured in your vehicle anywhere in the United States, its territories and possessions, or Canada, if they are not covered under another auto insurance policy in New York State.

All pedestrians injured by motor vehicles in New York State are also protected by No-Fault.

Liability coverage

As a resident of New York, there are two types of liability coverage your insurance policy must include: property damage and bodily injury.

Property damage safeguards your assets if you are found legally responsible for a covered accident. It covers certain damage you may cause to the property or vehicle of another party.

Bodily injury safeguards your assets if you’re found legally responsible for a covered accident, including certain expenses associated with bodily harm sustained by the other parties.

Personal injury protection (PIP) may reimburse a portion of wage loss, medical expenses and essential services incurred because of an accident to eligible injured parties (i.e. passengers or pedestrians).

What Auto Liability Insurance Doesn’t Cover

Auto liability insurance will only cover the injuries or damaged property of a third party.

For example, if a passenger is injured in an accident or another driver’s car is damaged in an accident, liability insurance will assist with any medical needs or repairs.

It will not cover the injuries that the insured driver sustains. It also will not cover the property damage of the insured driver, such as his car.