New York drivers are required by law to have proof of financial responsibility before they hit the road or even to register their vehicles. Your responsibility is considered fulfilled if you have a liability auto insurance policy with no-fault insurance, or when you obtain one of the acceptable alternatives to a policy.
When you register your car with the New York DMV, you will need to present a valid NYS insurance ID card (see an example here) sent to you by your insurance company. This will be matched to the digital record, which your insurer will have filed for you. If you are ever pulled over on the road, an electronic format of the insurance card will usually suffice.
|New York Required Car Insurance Coverage||Required Min. Limits|
|Bodily Injury (BI)||$25,000 per person / $50,000 per accident|
|Property Damage (PD)||$10,000 per accident|
|Basic Personal Injury Protection (PIP)||$50,000 per accidemt|
|Uninsured Motorist Bodily Injury (UMBI)||$25,000 per person / $50,000 per accident|
New York Car Insurance Minimum Requirements
The easiest and most recommended way to satisfy the New York Motor Vehicle Financial Responsibility Law is by purchasing a car insurance policy. As long as you buy a policy with the required minimum limits, you will be able to drive with some protection. The lower the limits, the lower your auto insurance rates, and the greater your potential exposure in the event of an accident. The minimum coverage is as follows:
Bodily Injury (BI): a coverage that pays people you injure in an accident up to $25,000 per person, for a max of $50,000 for the injuries of two persons or more in a crash. For accidents that cause someone’s death, a minimum policy in New York will cover up to $50,000 per deceased to a total of $100,000 for two or more persons’ death in a given accident. Even though 25/50 is all you need to legally drive, insurers say that 100/300 are the limits that most New York drivers get. These higher limits are available and vary by insurer. Consider all of your assets, which can be exposed to lawsuits, when choosing the appropriate limit.
Property Damage (PD): this coverage pays for the property damage you cause in an accident you are at fault for, up to $10,000 per crash. Together with BI, these two coverages are known as liability insurance, which means they pay out to third-parties – the other driver – when you cause an accident. Higher limits are available for PD as well, and vary by insurer.
Basic Personal Injury Protection (PIP): also known as no-fault insurance, this coverage helps pay for medical bills arising from your injuries in a car accident. It doesn't matter who is at fault (hence the label as "no-fault"), so your insurer will still pay you out so long as they're reasonable and medically necessary. All NY licensed auto insurers will offer basic PIP with a $50,000 limit per accident, which covers necessary medical expenses (or basic economic loss) such as hospital, psychiatric, physical therapy, rehabilitation, and long term professional health services if your injuries require so.
Within the same limit, if you are unable to work because of the injuries, you are entitled to 80% of your lost income, with a $2,000 monthly cap and a 3-year benefit time limit, as well as a $25 daily necessary household expense benefit for as long as a year from the accident. The New York No-Fault Law also mandates that insurers provide an additional $2,000 death benefit, on top of the $50,000 limit, for the beneficiary in the event that the insured driver dies in an accident. You can get higher PIP limits beyond the $50,000 limit, but it's considered a separate optional coverage and called "Additional PIP" or "Medical Payments" (below).
Uninsured Motorist Bodily Injury (UMBI): as its name suggests, this type covers similar grounds as BI does, except it is for your injuries if you were in an accident caused by a driver who does not have enough BI coverage to pay out to you. Put another way, if an uninsured driver crashed into your car, your own insurer would pay the medical expenses for you and your passengers up to $25,000 per person and $50,000 in total if there are two or more persons. A hit-and-run accident that is caused by an unidentifiable motorist also falls under this coverage. Note that, at limits 25/50 per accident, UMBI coverage only covers accidents that happen within New York State. Insurers may refer to UMBI as "Supplementary UMBI", which technically is coverage that exceeds the basic minimum limits required in NY - just keep an eye out for whether it exceeds 25/50.
Apart from purchasing the minimum coverage at higher limits, you can also increase your protection by buying extra coverage. Other types of common car insurance coverage, such as collision and comprehensive coverage, will most likely be available, varying by insurer. More importantly, since there are no higher limits for your no-fault insurance (basic PIP), several of these optional coverage are worth looking into if you want more protection for yourself:
Additional PIP: this adds to the $50k limit of your basic PIP, and provides the same kind of protection. Additional PIP will increase your basic PIP coverage limit by either $50,000 or $100,000 per accident, depending on the limit you choose to purchase.
Optional Basic Economic Loss (OBEL): this coverage adds another $50,000 to your basic PIP limit (and also the additional PIP, if you have it). Economic loss refers to monetary expenses, such as the medical bills from treatments, ambulances, and hospitals, that you may need for injuries sustained in an accident.
Medical Payments: sometimes referred to as the residual MedPay by NY insurers, this coverage pays out for the medical expenses and funeral expenses, if needed, for you and any of your passengers who do not have their own auto insurance policy. It is a first-party coverage, so regardless of fault of the accident it will cover you and your passengers up to the limit you purchase. Limits range between $500 and $2,000, and vary by insurer; however, some drivers may find this coverage redundant with their health insurance and other first-party coverage.
Supplementary UMBI: this provides extra UMBI protection on top of the mandatory 25/50 minimum through higher coverage limits. It also extends to any accidents you get into out of state involving an uninsured motorist. Note that many insurers refer to UMBI as Supplementary UMBI, and the real difference is just the limits. Higher limits are typically available up to at least 250/500; some insurers may offer more. Your Supplementary UMBI coverage limits may never be higher than your BI limits.
Your Right to Sue
New York is one of the states that limit its drivers’ right to sue in exchange for their no-fault insurance coverage. You can only sue for economic losses (quantifiable costs, such as healthcare bills) - in an auto accident, and not pain and suffering (referred to as non-economic loss). However, under the circumstance that you are suffering from some form of “serious injury” from an accident that someone else caused, you may be able to get an exception to this limitation. Here is the list of what may be defined as “serious injury” under the New York No-Fault Law:
- Significant Injury: such as a fracture (complete or partial break of a bone), or an injury that will prevent you from doing your daily activities, and determined by a doctor to need to take more than 90 days of the 100 days from the date of accident to recover.
- Significant Disfigurement
- Permanent injury: such as a permanent limitation in the use of a body organ or parts of your body.
- Significant/Permanent Disability: such as permanent loss or significant limitation in the use of a body part or body organ, body function, or body system.
- Loss of a Fetus
Alternative Proof of Financial Responsibility
If for some reason you decide to not get an auto insurance policy (or are unable to), there are three other ways to satisfy the required financial responsibility under the New York Motor Vehicle Safety Responsibility Act. Under any one of these alternatives, your proof of insurance will be a certificate or form of insurance ID card issued by the Commissioner of the Department of Motor Vehicle. Here are the alternatives:
- Security Deposit with the DMV: you may choose to deposit $150,000, in cash or security, with the Commissioner for a certificate of insurance. This deposit will act as your insurance to satisfy any claims or judgements against you from an accident. If the Commissioner at any point thinks that this deposit is not enough to satisfy the insurance requirement as would a minimum liability policy, he or she may ask you submit additional deposits.
- Surety Bond: if not a direct deposit with the DMV, you can instead file a surety bond issued by a NY licensed surety company to the DMV. The Commissioner will determine whether it is valid for payments for the same amount of insurance as a minimum liability policy would, and give you a certificate if he or she recognizes it. A surety bond is the surety company’s guarantee that you will pay for what you are responsible for in an accident, and that it will pay in your place if you cannot.
- Self-Insurance: when you own and have more than 25 cars register under your name, you may be able to apply to become a self-insurer. Apart from providing all documents that the Commissioner requires to prove your financial ability, you will have an annual fee to pay for each and every car listed under your self-insurance. The Commissioner will issue you a certificate if he or she is satisfied that you are able to continue to pay out for accident claims for every vehicle as would a minimum liability policy.