Why Is Car Insurance So Expensive In New York?
Car insurance in New York is so expensive due to no-fault laws, busy roads, tough winters, and high theft rates. The good news is that you can still find better rates by shopping around and following our expert tips
Car insurance in New York is extremely expensive, making it challenging for many drivers. Whether you’re in Manhattan or Ogdensburg, the high cost of living and increasing population in the state contribute to the steep premiums. Many drivers are shocked by how much they have to pay each year.
If you’re wondering why New York has some of the highest car insurance rates in the country, I can offer some insights from over 20 years of experience in the insurance industry. Keep reading to learn more about why car insurance is so expensive in New York.
Key Takeaways
New York’s average car insurance rate is a hefty $4,365 per year, making it the highest in the country.
American Family often offers the most affordable full coverage car insurance in New York.
High car insurance rates are a major factor in the inflationary pressures that New Yorkers face.
The high premiums are due to several factors, including a growing population, heavy traffic, high theft rates, the no-fault insurance law, severe weather, and higher rates of fatal accidents.
To save on car insurance, it’s a good idea to compare quotes from different insurance companies.
Why Is Car Insurance So Expensive In New York?
Car insurance costs have been rising steadily across the U.S., and New York is no different. Several reasons contribute to this, such as a growing population, heavy traffic, high theft rates, the no-fault insurance law, severe weather, and more fatal accidents.
Other factors that affect your premium include your age, where you live, the type of car you drive, and the insurance company providing the coverage.
Unique Reasons Why Car Insurance In New York Is So High
The cost of New York car insurance can be attributed to the following reasons as outlined below.
No-Fault Insurance Laws
Car insurance costs in New York are high due to the state’s no-fault insurance laws. These laws require drivers to have personal injury protection (PIP) coverage, which pays for medical bills and lost wages for anyone injured in an accident, regardless of who caused it. Only 12 states have no-fault insurance. While this system was designed to reduce lawsuits and fraud, it also means that even safe drivers have to pay higher premiums, even if they’re not at fault in an accident.
Severe Winter Weather
New York’s harsh winters, with lots of snow and ice, contribute to higher car insurance rates. The roads are salted to melt snow, but salt can lead to faster rusting and wear on vehicles..
Additionally, winter storms increase the likelihood of accidents, especially between October and April. Slippery roads, snow, ice, and animals on the road make driving dangerous, and even when roads are cleared, some drivers don’t drive cautiously, leading to accidents.
Garage Fraud
Garaging fraud is when people register their cars in states with lower insurance rates while actually living in New York.
Although state law requires residents to register their vehicles within 30 days of moving to the state, many violate this rule with little consequence. This illegal practice drives up insurance rates for everyone.
High Vehicle Theft Rate
New York has one of the highest vehicle theft rates in the country. According to the National Insurance Crime Bureau, the state ranks seventh for vehicle thefts, with 2023 seeing record highs. Popular targets for theft include the 2021 Honda CR-V, 2021 Honda Accord, 2019 Honda Civic, and 2016 Toyota Camry. This high theft rate contributes to rising insurance premiums in the state.
Population Density
New York is home to nearly 20 million people, and its cost of living is among the highest in the country. With so many people and drivers on the road, along with higher living costs, it’s no wonder that car insurance is more expensive in New York compared to other states.
Additional Minimum Car Insurance Requirements
In New York, auto insurance is necessary to register and drive a car, and the state has some of the highest minimum insurance requirements. These include $10,000 for property damage, $25,000 for bodily injury and $50,000 for death per person in an accident, and $50,000 for bodily injury and $100,000 for death or all people in an accident.
Additionally, drivers are required to have personal injury protection (PIP) and uninsured motorist coverage. These coverage requirements are more extensive than what is typically required in many other states, where liability-only coverage is often enough. Because New York requires more coverage, it naturally increases the cost of car insurance, contributing to the state’s higher premiums.
Note: Car thefts are on the rise, but many car thefts can be prevented with simple steps. Lock your car, hide valuables, never leave it running unattended, and consider installing anti-theft and GPS devices. Parking in well-lit areas and etching your VIN can also deter thieves. Taking precaution can save you a lot of hassle, and possibly lower your insurance premium.
Factors Causing Your Car Insurance To Be So High
Some other factors can also have an impact on your car insurance rates in New York. Below are some of the most common ones that can affect your premium.
Insurance Company
The insurance company you choose has a big impact on your car insurance rates in New York. Rates can differ between providers, and each company considers factors like their experience with certain types of drivers. Companies evaluate things like your age, location, and driving history based on their own standards, which is why prices can vary.
Location
Where you live is a major factor in determining your auto insurance cost. Urban areas with higher risks for theft, accidents, and vandalism typically have higher premiums. For example, insurance in Manhattan is much more expensive than in a smaller city like Rochester because of these elevated risks.
Driving Record
Your driving history can affect your rates, even if it’s just one speeding ticket or minor accident. Insurance companies usually review your driving record from the last three to five years. However, more serious violations like a DUI or multiple speeding tickets may impact your rates for a longer period.
Claim Frequency
The number of claims you file plays a role in determining your premium. Since more cars are on the road after the pandemic, there has been a rise in accidents, which has led to more claims. Additionally, the severity of claims is rising because of higher medical costs and the expense of repairing newer cars. If you’ve filed several claims or were found at fault in accidents, your rates could be higher.
Age
Your age is another important factor in setting your insurance premium. Younger drivers, particularly those under 25, usually face higher rates due to their inexperience. However, some insurance companies offer discounts for students or young drivers, which can help lower those premiums. On the other hand, drivers over 65 might also see their rates increase.
Credit Score
In New York, insurers can consider your credit score when setting your rates. Drivers with poor credit scores generally pay higher premiums compared to those with good or excellent credit.
Note: To reduce your insurance costs, improving your credit score can help. Pay your bills on time, lower any debt, and check your credit report regularly for errors.
Coverage Level
The amount of coverage you choose affects your premium. Higher levels of coverage result in higher premiums, with differences potentially amounting to over $1,000 per year. This is because the more coverage you have, the more the insurance company may need to pay out in case of an accident. Also, higher deductibles can lower your premium, but they mean you’ll pay more out of pocket if you make a claim.
How To Get Cheaper Car Insurance?
In New York, there are several ways to lower your car insurance premiums by using available discounts. Here are some common ways to save:
Take a defensive driving course: Completing an approved defensive driving course can reduce your traffic points and lower your insurance rate by up to 10% for three years. These courses are available online or in person.
Add safety features to your car: Installing safety features like alarms, tracking devices, and warning sensors can reduce the risk of theft, damage, or accidents. Insurers may reward you with a discount for having these features.
Maintain a safe driving record: Keeping a clean driving record, free from accidents, tickets, and claims, can help lower your premiums. Many insurers offer discounts to drivers with a history of safe driving.
Bundle your policies: Purchasing multiple insurance policies, such as home, renters, or umbrella insurance, from the same company can often lead to a multi-policy discount. However, it’s worth comparing rates to see if you can save more by keeping policies separate.
Shop around for the best deal: Rates can vary widely between insurance companies, so it’s a good idea to compare quotes from different insurers. By shopping around, you can find the best coverage at the most affordable price for your needs.
FAQs
What should I do if my car insurance is too high?
If your car insurance is too high, consider shopping around for quotes from different providers, increasing your deductible, or asking about available discounts like safe driving or bundling policies. Also, review your coverage levels to ensure you’re not paying for unnecessary extras.
Why did my car insurance rate go up?
Your car insurance rate may have increased due to factors like traffic violations, accidents, changes in your driving record, rising claims in your area, or an increase in the cost of repairs and medical treatments. Additionally, factors like the location you live in or changes in your credit score can also impact your rates.
Sources
⇅- Department of Financial Services – Consumer FAQs About No-Fault Insurance
- WIBX – Top 10 NY Auto Thefts
- Silive – Why are New York Car Insurance Rates So High?
- Department of Financial Services – How To Shop For Auto Insurance
