Without automobile insurance, a driver cannot register or legally operate a car in New York State. But with the rising costs of insurance—some, $8,000 or more a year—must know how auto insurance works in order to find the best deal. And since the same coverage in the same area of New York may vary in cost from one company to the next by 70 percent, it really pays to shop around. Following are some facts and tips to help you choose the proper coverage.

see cost comparison chart

&#147No-Fault”coverage
In 1973, New York passed legislation requiring all New York State drivers to be covered for up to $50,000 in medical expenses in the event of an auto accident, regardless of who was at fault. Because of this "no-fault" law, lawsuits can only be brought in instances where economic losses exceed the maximum $50,000 coverage and for non-economic damage, such as pain and suffering, when "serious injury" is sustained.

The economic losses covered by no-fault insurance include:

• all necessary medical and rehabilitation expenses
  
• 80% of lost earnings from work, up to a maximum of $2,000/month
• up to $25/day for a year for other reasonable and necessary expenses resulting from the accident
  
• $2,000 in death benefits.

No-fault coverage protects you when driving anywhere in the U.S. and Canada. It also covers passengers who are New York residents.

Liability Insurance
Liability insurance, also required by law, protects you (and anyone driving your car with your permission) in the event that your car injures or kills another person or damages another person¼s property, and a claim is made against you for being negligent or otherwise at fault. In addition, liability insurance covers the cost of legal defense if such a claim is made against you.

New York State law requires New York motorists to have the following minimum liability coverage:

• $25,000 for injury (not death) to one person in any one accident
• $50,000 for injury resulting in death to one person in any one accident
• $50,000 for injury (not death) to two or more people in any one accident
• $10,000 for property damage, such as damage to another person's auto
• $100,000 for injury resulting in death to two or more people in any one accident.

Uninsured Motorist Insurance
If you, a member of your family, or an occupant of your car is injured in a hit-and-run accident or by an uninsured motorist, you can get compensation under New York law. You will be eligible for a minimum of $10,000.

Underinsured Motorist Insurance
This coverage is optional in New York State and will pay for your "pain and suffering" claims after the other driver's coverage has been exhausted.

What is the "Assigned Risk" Insurance Category?
Drivers who are considered "high risks" are insured in what is technically called the New York Automobile Plan. Assigned risk is meant for those drivers considered high risks, such as drivers with a history of at-fault accidents or drivers with many traffic violations. Unfortunately, drivers living in certain areas of New York City and younger drivers are also lumped into the "assigned risk" category even though they may have perfect driving records. If you are one of these good drivers and have been placed in the assigned risk category by your insurer, contact your state representative and register your complaint. Only state lawmakers can change the inequities of the assigned risk pool.

What auto insurance options are available?
Higher Amounts of liability insurance
Often accidents can result in legal judgments against a negligent driver that exceed the legal minimum amounts of insurance coverage, leaving the driver to pay the remainder of the bills. Thus, higher amounts of insurance coverage can provide additional protection.

Should I consider buying higher levels of coverage?
There are at least two reasons to consider purchasing additional coverage. First, if you have assets (a house, for example), you should consider purchasing higher limits of liability coverage. Buying increased liability limits is a good idea if you want to protect your assets in case a potential lawsuit settlement exceeds your coverage.

Second, the cost of medical care has skyrocketed since 1973. The $50,000 limit may not be enough in some cases. You can double your no-fault limit relatively inexpensively.

Physical damage coverage: comprehensive
Comprehensive insurance pays -without regard to fault- for physical damage to your car, such as fire, theft, vandalism, etc. Comprehensive coverage does not cover damages from collisions or from your car overturning. While this coverage is optional under state law, it is required by lending institutions if you obtain a car loan.

Physical damage coverage: collision
With this optional coverage, your insurer pays you -without regard to fault- for damage to your car caused by collision with another car, collision with any other object, or your car overturning.

If you have a fairly new car, this optional coverage may be a good idea. If you feel the value of your car does not warrant the additional cost of collision coverage you may purchase only comprehensive coverage.

If you have an older car, purchasing either comprehensive or collision coverage might not be worth it. Remember, you will never be paid more than the market value of your car, taking depreciation into account. Very old cars may not be worth this additional coverage, but if the car¼s purchase has been financed by a lending institution, you should consider physical damage protections. While this coverage is optional under state law, it is required by lending institutions if you obtain a car loan.

What if my insurer cancels my policy?
New York's Insurance Law protects you from arbitrary cancellation while your policy is in force. Even at the end of your policy, your insurance company may not be able to cancel. A company is generally limited to being able to cancel no more than 2% of its auto policies. At the end of a one-year period, the insurance company must renew your policy for another year, unless they give you at least 45 days or more notice and reasons for cancellation in writing.

COST COMPARISON REGION    AGE OF DRIVER    HIGHEST PRICE    LOWEST PRICE    Albany (city ) 20 3006 1161    35 1615 543    Albany (suburban) 20 3784 1062    35 2143 508    Bronx (urban) 20 9169 4018    35 5561 2037    Bronx (suburban) 20 7142 3302    includes part of Manhattan 35 3981 1595    Brooklyn 20 10308 3911    35 4931 2339    Buffalo (urban) 20 4193 1779    35 2363 834    Buffalo (suburban) 20 2803 1192    35 1559 550    Clinton 20 2717 1052    35 1511 490    Columbia 20 3530 1143    35 1871 541    Cortland 20 2697 1146    35 1497 538    Delaware 20 3363 1143    35 1837 541    Elmira 20 3259 1034    35 1869 489    Hempstead (Nassau) 20 4887 2583    35 2839 1299    Manhattan 20 6191 2703    35 3227 1466    Mount Vernon & Yonkers 20 5819 2109      (Westchester) 35 2869 932    Poughkeepsie 20 3631 1470    35 1935 674    Queens (urban) 20 7797 3430    35 3794 1731    Queens (suburban) 20 7083 3202    35 4119 1752    Rochester (urban) 20 2776 1086    35 1465 559    Rochester (suburban) 20 2750 1042    35 1566 479    Staten Island 20 6504 2885    35 3557 1541    Suffolk County West 20 4642 2146    35 2563 1087    Sullivan 20 5364 1659    35 2738 751    Syracuse (urban) 20 3097 1198    35 1715 556    Syracuse (suburban) 20 3042 1198    35 1737 556    Troy 20 2995 1161    35 1668 543    Utica 20 3748 1490    35 1979 674    Source: New York State Insurance Department Consumer’Guide on Auto Insurance, 2000 (www.ins.state.ny.us). Prices were calculated by adding together the auto insurance costs in the guide for 20 and 35 year old male drivers who purchase required coverage, collision coverage (with $200 deductible), and comprehensive coverage ($200 deductible). Highest and lowest premiums for each age group are listed. Assigned risk premiums not included for 35 year olds.

However, if your license is suspended or revoked your insurer can cancel your policy. The surest way to continue coverage is through safe driving.

Should I take out insurance for a car rental?
All car rental companies must provide whatever minimum liability and no-fault coverage required by law in the state where you rent or drive the car. In addition, under New York law, if you rent a car you are only liable for, or charged, up to $100 in vehicle damages, unless you drive in a negligent manner. Remember, New York law requires all companies to cover drivers when they rent cars out-of-state. You do not need to purchase additional auto rental insurance anywhere in the country.

How can I save money in purchasing auto insurance?
Increased deductibles
One way to reduce your auto insurance costs is by buying policies with higher deductibles. A deductible means that you agree to pay for a designated portion of the cost of repair to your auto. For example, if you incur $5,000 in damages on your car and you have a physical damage policy with a $250 deductible, you receive from your insurance company payment for everything after the first $250-in this case $4,750.

Discounts and other cost-cutting measures
You should ask a prospective insurance company about low-mileage, senior citizen and car pool discounts, if you think you might qualify. New York requires reductions in auto insurance costs for drivers who have successfully completed driver education courses. Insurance companies are required to provide discounts to drivers who have participated in driver education courses, or have anti-lock brakes, automatic seat belts, airbags and other safety devices installed in their automobiles.

SHOP SMART!
There is a wide range of policy costs in every region of the state. According to Insurance Department data, the same coverage in the same area of New York may vary in cost from one company to the next by as much as 70 percent! It is important to call around for price quotes before deciding on a company.

Check the Service Record
Obviously, price is not the only important factor in choosing an insurer. Consumers need to ask questions determining, for example, promptness of claim payments and reliability of coverage. Thanks to legislation supported by NYPIRG in 1992, the New York State Insurance Department is required to publish annually a consumer's guide to auto insurance companies. The guide contains price comparisons of auto insurance policies by region, a ranking of auto insurers based on consumer complaints and the phone numbers of auto insurance companies. The guide, "Consumers Guide on Automobile Insurance," can be obtained by calling the Department at 212-602-0473 or on its website www.ins.state.ny.us (go to "Consumer").