Why is Car Insurance Mandatory in New York State?
June 29, 2020
Massachusetts and Connecticut were first, but New York followed close behind
While not every state requires automotive insurance, many do. New York is one state that requires car owners to have insurance, and was one of the first to implement legal requirements for coverage. New York requires drivers to be covered with “...$25,000 for bodily injury to one person, $50,000 for bodily injury to all persons, and $10,000 for property damage in any one accident.”1 These are the minimum requirements for automotive coverage on New York state-registered vehicles, but drivers are at liberty to opt into higher-coverage packages.
Why do so many states require automotive insurance? Massachusetts and Connecticut were the first states to introduce compulsory laws for automotive coverage, but New York quickly fell in line with the trend. The prime motivation behind compulsory automotive coverage is to prevent those found to be at fault for accidents from defaulting on reparative payments. If every driver on the road has coverage for accidents, then there is less to worry about in the instance of a driving error or other incident.
Different types of coverage are codified for different reasons in New York State and it is important to understand what different types of insurance cover and how it protects everyone on the road.
Perhaps the most important type of insurance coverage in an automotive insurance package is the liability coverage. The origin of insurance lies in what has evolved into liability coverage; the essence of which includes coverage for bodily injury and property damage if you are found to be at fault of an accident.
On top of liability insurance, New York also requires PIP (Personal Injury Protection) coverage of no less than $50,000. The PIP law provides that all parties involved in an automotive accident must file a claim with their own insurance company, regardless of who is at fault, this assures that all parties are quickly reimbursed after an accident.
While there are many other types of automotive coverage that your provider is likely to offer you, the base policy must have the minimum coverages previously mentioned . This mandated coverage may seem steep for every person who drives on a New York registration, but New York does also offer discounts on policies that makes it more affordable for the driver, but still lucrative for insurance companies to cover all drivers in the state. For more information about what discounts you may qualify for, check the New York State Automotive Insurance FAQ page.
Ultimately, the reason behind compulsory automotive insurance in New York is to protect every driver on the road equally. Before compulsory laws, accident suits were often left to be defaulted on by those found responsible. As with many other states, New York’s insurance minimums provide a level of certainty to everyone on the road that if there is an incident involving a car those affected will be compensated.
If you are looking for automotive insurance or guidance on how to optimize your current coverage, consider giving us a call at 607.734.8799—we at Wallin Insurance would love to help!
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1 “FAQs: Automobile Insurance.” Department of Financial Services. New York State. Accessed June 29, 2020. https://www.dfs.ny.gov/consumers/auto_insurance/auto_insurance_faqs.
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