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In the state of New York, you are required to prove that you are financially responsible before you can register your vehicle, obtain plates or drive a licensed vehicle.

As proof of financial responsibility, you can either file a cash bond with the Department of Financial Services or purchase auto insurance from a company that is licensed by the DFS to do business in the state of New York.

Because most individuals do not have thousands of dollars to give as a deposit to the Department, they choose the more practical option which is to buy insurance. By choosing to purchase an insurance policy, the burden to pay for claims of damage and injury is placed on the insurer and not on your shoulders.

Read on, and learn more about the minimum auto insurance requirements in New York, optional coverage forms available in the state, and how to select the best insurance policy.

What are the minimum auto insurance requirements in New York?

If you choose to satisfy the financial responsibility laws with New York car insurance, you must purchase a minimum amount of coverage before you will be issued licensed plates. Because New York operates under a no-fault system, you will be required to pay for both liability coverage, uninsured motorist and personal injury protection.

Here is a breakdown of coverage requirements that all licensed drivers in New York should be familiar with:


No-fault insurance will pay for your injuries and other expenses accrued due to a covered loss. Rather than negotiating with the other insurer to pay for your medical claims, your insurer will pay your medical expenses directly regardless of fault. This is said to reduce the amount of time it takes to process a claim and the amount of cases that are litigated.

Every state sets their own unique no-fault requirements for Personal Injury Protection. You must purchase basic No-Fault coverage at a minimum. Basic coverage includes the following benefits:

  • Reasonable medical expenses (up to $50,000)
  • Reasonable rehabilitation expenses
  • 80% of lost wages, up to $2000 monthly
  • $2,000 death benefit
  • Up to $25 per day for in-home help

Liability Insurance

While you do live in a no-fault state, you are still required to carry liability in case you are involved in an accident with a driver who lives in a state that operates under a tort system. Liability insurance is designed to pay for injuries and damages that you or drivers on your policy cause to a third party driver.

Carrying liability insurance is important to protect your assets. Here is a breakdown of liability limit requirements:

  • $25,000 per person in bodily injury not resulting in death
  • $50,000 per person if injury results in death
  • $50,000 per accident in bodily injuries not resulting in death
  • $100,000 per accident in injuries resulting in death
  • $10,000 in property damage

Uninsured Motorist

Not all states require drivers to carry uninsured motorist, but in New York this coverage is a requirement even though the rate of uninsured drivers is very low at 5%. This requirement is designed to protect you as a driver from those who do not carry coverage or if you are the victim in a hit-and-run accident.

You must carry the same minimum limits of bodily injury that are required. You do have the option to increase these limits if you select higher liability limits, but UM cannot exceed your liability limits.

Can insurance be verified?

You may be wondering how the Department of Motor Vehicles can verify whether or not you have coverage, and the answer is electronically. The state of New York has a Insurance Information and Enforcement System (IIES) that is designed to detect uninsured drivers when their insurance is cancelled or does not renew.

This means that people can be penalized for having no insurance even when they are not pulled over by law enforcement.

All licensed insurance companies in the state will verify a policyholder's coverage electronic and notify the department when the policy is no longer active. If you do not have coverage from a new provider, you will have a lapse in coverage and be considered uninsured. This could result in the suspension of your license plates, which will cost money to reinstate.

What is the penalty for driving without insurance?

You must carry continuous coverage and auto insurance identification cards with you at all times. If you are caught driving without insurance, you are involved in an accident as an uninsured driver, or your policy cancels and the Department is notified, you can face severe and expensive penalties.

Your vehicle registration will be suspended immediately when the DMV is notified of insurance cancellation. Your driver license may also be suspended or revoked for up to one year if you are involved in an accident with no coverage.

You may also face fines in traffic court if you are issued a citation for driving without insurance. Not only must you pay a fine up to $1500, you may also have to pay a civil penalty to the state if your licensed in revoked and you want to get it back.

As you can see, choosing to drive without insurance in New York is a much more costly decision than purchasing even a basic insurance policy.

Optional Coverage That You Can Purchase

In addition to basic insurance requirements, you can add additional coverage options to your policy for more protection. Here are some of the optional coverage types that you can purchase from any insurer in the state of New York:


If your vehicle is leased, financed or carries a high value, you should carry physical damage coverage. Comprehensive is the form of physical damage cover that will pay for damage to your car for causes other than collision.

This includes fire, theft, flying objects, windstorm, glass breakage, and falling objects. You will be required to pay a deductible before any claims payments will be made.


The second form of physical damage coverage, which costs more out of pocket, is collision. This coverage will pay you, with no regard to fault, if your vehicle is damaged in an accident with another vehicle or an object. You must also satisfy your deductible to make a claim for collision payment.

Accidental Death and Dismemberment

This rider will provider temporary disability benefits or life insurance when a covered insured sustains serious injuries or dies in an accident in your car. Benefits will be paid in addition to other no-fault and liability limits.

Towing and Labor

You have the option to add towing coverage to your policy for coverage when your vehicle is disabled and needs to be towed to an off=site location. Lockout, tire changes and battery delivery may also be included.

Rental Car

If you only own a single vehicle or you will need a replacement vehicle when you file a claim, carrying rental car is important. You will receive a daily benefit to rent a replacement car until your vehicle is repaired.

How to Select the Best Insurance Company in New York

Not all insurance companies are created equal, even if they are required to offer the same required coverage forms and limits. If you want to feel protected, you should consider more than just price as you shop for cover. It is very important to choose a company that is financially stable and secure in the market.

This is why you should use independent rating reports that are written by third-party agencies to determine whether or not a company is worthy of your business.

By using consumer ratings to assess the solidity of a company, you will have peace of mind in knowing the insurer that you do business with will not go out of business in the near future.

You should also check to see if the company has any active complaints filed against it. These complaints could be due to discriminatory practices, unfair claims decisions, or failure to pay a claim in a timely manner. You can access licensing information, complaint records, and current industry status by visiting the Department of Financial Services website directly.

Visit the complaint response system and see what you can find out to help you make your decision.

If you want to find the best rates for New York car insurance, it is very important to shop around. Every company in the industry sets their own rates once the rate filings are approved by the Department. Because of this, it is common for some companies to be competitive in specific markets and not competitive in others.

Use our advanced online rate comparison tool for FREE to compare the prices of insurance for all of the top-rated companies in a matter of minutes, and feel confident with the purchase you make.

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