New York State is a no-fault auto insurance state. Whether this is a good thing or a bad thing really depends on who you ask. Currently, the only other no-fault states are: Kentucky, Hawaii, Kansas, Massachusetts, Michigan, Pennsylvania, Florida, New Jersey, Minnesota, North Dakota and Utah.
Pros of New York No Fault Auto Insurance
Proponents of the no-fault auto insurance system say that it lowers premiums by eliminating unnecessary litigation. Say you were in an accident in a tort state like Texas and you caused $15,000 in damage to the other vehicle. If the accident was deemed your fault, you would be expected to pay for the loss to the other person’s car. However, if you were not adequately insured or if you were uninsured, the other driver could sue you.
The process could take a long time to resolve if both drivers are telling different stories to escape blame. In a no-fault state, the insurance you buy covers your injuries, the injuries of your passengers and damage to your vehicle, regardless of who is to blame. Some might say this encourages defensive driving.
Cons of New York No Fault Auto Insurance
On the other hand, critics of the no-fault system say that abuse is still rampant in the system. Some people claim they’ve been in an accident just to get compensation for things like time off work and money for hospital treatments. Just this past February, the feds broke up a $279 million auto insurance fraud scheme in New York, where 10 doctors and 3 attorneys helped people falsify documents to obtain benefits up to $50,000, regardless of fault. Unfortunately, these scams drive up the cost of premiums for everyone.
The Bottom Line:
New York requires every driver to carry a minimum insurance of $25,000 for personal injury protection, $50,000 for a passenger’s injuries, and $10,000 for property damage. To get the most coverage for the least amount of money, it pays to shop around!