Changes to New York Car Insurance Laws You Should Know

1. Increased Minimum Liability Insurance Requirements
New York State significantly raised mandatory liability coverage limits effective October 2021, marking the first increase since 1984. Drivers must now carry:

• $25,000 for bodily injury to one person (up from $10,000)
• $50,000 for bodily injury per accident (up from $20,000)
• $10,000 for property damage (unchanged but often requires supplemental coverage due to repair costs).

This 150% increase in bodily injury minimums reflects rising medical expenses and legal judgments. Insurers must offer underinsured/uninsured motorist (UM/UIM) coverage at matching limits, critical since 8.3% of New York drivers are uninsured (Insurance Information Institute, 2023).

2. Wrongful Death Liability Expansion
The state enacted the Grieving Families Act (2023), broadening liability for fatal accidents. Families can now claim compensation beyond economic losses––including emotional anguish, loss of companionship, and funeral expenses––for deaths occurring after July 1, 2018. Insurers face higher settlement risks, potentially driving up bodily injury premium rates by 5-15% in high-density areas like NYC. Policyholders should review liability limits to ensure adequate protection against expanded claims.

3. Credit Score Ban for Insurance Pricing
In December 2022, New York banned insurers from using credit scores to determine personal auto premiums (A1176A/S5244B). This shift replaces creditworthiness with primary reliance on:

• Driving history/violations
• Annual mileage
• Claims history
• Policyholder age/experience

Studies suggest this could help 20% of drivers with poor credit save up to $500 annually but may raise premiums for low-risk drivers with high credit scores. Companies must refile rates for DFS approval by 2024.

4. Rideshare Insurance Mandates
New regulations effective January 1, 2024, require TLC-licensed rideshare drivers (Uber, Lyft) to carry commercial-grade insurance:

• Period 1 (app on, no ride): $75k liability
• Period 2 (passenger en route): $150k liability

These surpass standard personal policy limits. Personal auto policies typically exclude rideshare activities during trips, creating coverage gaps. Hybrid endorsements like Progressive’s Rideshare Coverage or Erie’s TNC Add-On fill this need for 185,000+ NYC gig drivers.

5. Anti-Fraud Tech Enhancements
DFS now permits insurers to use telematics and AI-driven fraud detection tools (NYCRR 67.4). Usage-based insurance (UBI) programs with dashcams or mobile apps (e.g., Hartford’s TrueLane) are increasingly common, offering discounts of up to 20% for safe drivers but raising privacy concerns. Concurrently, strengthented fraud penalties target staged accidents and exaggerated claims, which cost New Yorkers $850 million annually in higher premiums (Coalition Against Insurance Fraud).

6. Uninsured Motorist (UM/UIM) Coverage Adjustments
UM/UIM minimums now align with new liability limits (25/50/10). Policyholders can “stack” coverage for multiple vehicles, though insurers must offer non-stacked alternatives. Key changes include:

• UM/UIM claims permitted for hit-and-run incidents without physical contact if corroborated by evidence (previously required contact)
• Mandatory notification if claimants fail to cooperate with litigation

7. No-Fault Insurance (PIP) Updates
New York’s no-fault system ($50k PIP minimum) now caps acupuncture treatments at 25 sessions unless medically necessary, reflecting cost containment efforts. Updated fee schedules reduce chiropractic/PT reimbursements by 10-20%, potentially increasing out-of-pocket costs. Insurers can deny PIP claims within 30 days of submitting incomplete NF-2 forms, tightening documentation timelines.

8. Diminished Value Claims Restrictions
Recent case law (Williams vs. GEICO, 2022) limits diminished value claims under standard policies. Post-repair value loss is now recoverable only if explicitly included in policy language, shifting risk to owners of high-value vehicles (e.g., Tesla, luxury brands).

9. Mandatory Written Notices
Insurers must provide policyholders with:

• Plain-language summaries of coverage changes, including opt-out rights for UM/UIM
• Disclosures detailing how driver data is collected/used in UBI programs (NY Senate Bill S5012)
• Annual updates about supplemental property damage add-ons (e.g., rental, roadside assistance)

10. Accident Forgiveness Clarifications
DFS now standardizes accident forgiveness programs to prevent predatory terms. Eligible accidents must:

• Not involve criminal charges
• Have damages below $2,500
• Exclude drivers under age 25 for major insurers (Geico, Allstate)

Forgiveness cannot increase premiums beyond pre-set terms outlined in renewal documents.

What Drivers Should Do Now

• Compare Quotes Annually: Rate structures vary post-credit score ban.
• Increase Liability Limits: Consider $100k+ bodily injury coverage pending lawsuit risks.
• Add Rideshare Endorsements: If gig driving, even occasionally.
• Document Claims Thoroughly: Especially UM and diminished value claims.
• Opt for Electronic Monitoring: If comfortable, leverage UBI programs for discounts.

New York’s auto insurance laws reflect balancing consumer protections with insurer sustainability. Regular policy reviews (ideally biannually) ensure compliance and optimal coverage as regulations evolve.