New York Auto Insurance Laws Simplified

New York Auto Insurance Laws: Understanding the Basics

Mandatory Minimum Coverage Requirements
New York law requires all registered vehicles to carry auto insurance that meets specific minimum liability limits. Drivers must purchase:

• Bodily Injury Liability
  – $25,000 per person
  – $50,000 per accident (if multiple people are injured)
  This covers injuries you cause to others in an at-fault accident.

• Property Damage Liability
  – $10,000 per accident
  Pays for damage you cause to other vehicles or property (e.g., fences, buildings).

• Personal Injury Protection (PIP)
  – $50,000 minimum
  Covers medical expenses, lost wages (up to 80%), and essential services (e.g., childcare) for you and passengers, regardless of fault.

• Uninsured/Underinsured Motorist (UM/UIM) Coverage
  – Matches bodily injury liability limits ($25,000/$50,000)
  Protects you if hit by a driver with no insurance or insufficient coverage.

These limits are non-negotiable. Failure to maintain coverage can result in severe penalties (see below).

No-Fault Insurance System Explained
New York operates under a “no-fault” system. This means:

• After an accident, each party files a claim with their own insurer for medical costs and economic losses (via PIP), irrespective of who caused the crash.
• Lawsuits are generally prohibited unless the injured person sustains a “serious injury,” as defined by state law (e.g., fractures, permanent disfigurement, disability lasting 90+ days).
• PIP covers:
  – Medical treatment (doctors, hospitals, rehabilitation)
  – 80% of lost wages (up to $2,000/month for up to three years)
  – $25/day for other expenses (e.g., household help)
  – $2,000 death benefit (in addition to survivor’s economic losses)

Uninsured/Underinsured Motorist (UM/UIM) Protections
UM/UIM coverage is mandatory in New York and safeguards you if:

• The at-fault driver has no insurance.
• The at-fault driver’s limits are too low to cover your bills.
• You’re injured by a hit-and-run driver.

UM/UIM applies to bodily injury, not vehicle damage. For property repairs, you’ll need collision coverage (optional).

DUI-Related Insurance Rules
Drivers convicted of DUI or other serious violations (e.g., reckless driving, accumulating 18+ points in 18 months) must:

• File an SR-22 certificate with the NY DMV for three years, proving continuous coverage.
• Purchase a high-risk insurance policy, which costs significantly more than standard plans.
• Pay a $750 annual driver responsibility assessment fee for three years.

Multiple violations can lead to indefinite SR-22 requirements.

Penalties for Driving Without Insurance
Failing to maintain coverage carries stiff consequences:

• First Offense
  – $150–$1,500 fine
  – Up to 15 days in jail
  – $750 annual fee for three years
  – License/registration suspension for at least one year

• Subsequent Offenses
  – Higher fines
  – Longer suspension periods
  – Potential vehicle impoundment

To reinstate driving privileges after a suspension, you must:

1. Pay a $25 license suspension termination fee.
2. Pay a $70 re-application fee for registration/plates.
3. Submit proof of insurance (Form FS-1).

Other Key State-Specific Rules

• Electronic Proof of Insurance Accepted
  New York permits digital ID cards via smartphone apps. Law enforcement and the DMV accept electronic verification.

• Automatic Registration Suspension
  Insurers notify the DMV electronically if a policy lapses. Registrations are suspended within 30 days unless proof of reinstatement is provided.

• Insurance ID Cards
  Drivers must carry a physical or digital insurance ID card in their vehicle. Failure to show proof during a traffic stop can lead to a $150 fine.

Optional Coverage Add-Ons
While not required, these policies enhance protection:

• Collision Coverage
  Pays for repairs to your vehicle after an accident.

• Comprehensive Coverage
  Covers non-collision damage (e.g., theft, vandalism, weather).

• Gap Insurance
  Covers the difference between your car’s depreciated value and the loan/lease balance if totaled.

• Supplementary Uninsured Motorist (SUM)
  Extends UM/UIM limits beyond state minimums (up to your liability coverage amount).

Exemptions to Insurance Requirements
Few exceptions exist:

• Certain government-owned vehicles (e.g., municipal buses, police cars)
• Trailers or semi-trailers with empty weights under 1,000 lbs
• Self-insured entities (approved by the DMV Commissioner)

FAQs: Common Questions Answered

1. Can I drive with out-of-state insurance in NY?
   No. New York requires policies issued by insurers licensed in the state.

2. Are Uber/Lyft drivers subject to different rules?
   Yes. Rideshare drivers must carry commercial policies with $75,000/$150,000/$25,000 limits during passenger transport.

3. Does PIP cover motorcycle accidents?
   No. Motorcyclists must carry liability insurance but can opt out of PIP.

4. Who is covered under my policy?
   Named drivers, household residents, and anyone driving the insured vehicle with permission.

5. How are rate increases determined after accidents?
   Insurers can raise premiums if you’re 51%+ at fault. Severe violations (DUI, speeding 15+ mph over limit) impact rates for up to 36 months.