Trouble Getting Coverage | Department of Financial Services

Introduction

Are you having trouble finding an auto insurance company that will willingly provide you with the coverage you need? Don’t worry, just because a few agents or brokers couldn’t find coverage for you doesn’t mean there isn’t an insurer out there willing to help. It’s important to remember that no single agent or broker has connections with every auto insurance company operating in New York. To determine the specific companies they have access to, ask the agent or broker you’re working with about the auto insurance options available to you.

The New York Auto Insurance Plan (NYAIP)

If you’re still unable to find an auto insurance company that meets your requirements, there is a special insurance facility called the New York Auto Insurance Plan (NYAIP) available to provide the necessary coverage. Sometimes referred to as the automobile or assigned risk plan, the NYAIP was established under New York state law to ensure that everyone has access to the coverage they need. Most agents and brokers licensed to write car insurance policies are certified to offer coverage through the NYAIP.

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If you’re unable to locate a certified broker or agent, you can reach out to the NYAIP directly at (212)943-5100 or visit their website for assistance.

The Competitive Voluntary Auto Insurance Market in New York

New York’s voluntary auto insurance market is highly competitive, offering coverage to consumers whom insurance companies believe they can insure with a reasonable profit. In the past, auto insurers primarily focused on writing business for preferred (better than average) or standard (average) drivers.

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However, there are several insurers specializing in providing coverage to drivers who, due to various underwriting factors such as driving history, vehicle age, or being a newly licensed driver, previously struggled to find coverage outside of the non-standard car plan. Many insurers utilize “multi-tier” rating programs, allowing them to establish multiple rate tiers within their company. These programs are designed to encourage drivers to move out of the car plan. Under such programs, insurers broaden their underwriting guidelines and group policyholders with similar characteristics into qualifying “tiers.”

During policy renewal, the insured individual’s experience and characteristics are re-evaluated to determine if they qualify for a different tier. If your insurer uses a multi-tier classification system, you should have received a disclosure notice explaining your program. Additionally, your policy declarations page should indicate the specific tier your policy is classified under. However, if all else fails, the residual market, also known as the auto plan, is available for those who have been declined coverage in the voluntary market.

Premiums and Discounts in the Auto Plan

Premiums for auto plan coverage tend to be higher because the overall loss experience for this group of drivers has consistently been worse compared to the voluntary market. However, under the car plan rules, careful drivers who have been accident-free and conviction-free for at least one year, and have a minimum of four years of licensed driving experience, are eligible for a “careful driver” discount.

When you submit an application through the auto plan, it will be assigned to one of the many auto insurers operating in New York State. The premium for an auto plan policy should be the same regardless of which insurer your application is assigned to or which agent or broker handles it. Be cautious if you receive different quotes for an auto plan policy. Some agents or brokers may intentionally offer lower premiums to secure your business. It’s important to note that the insurer is not responsible for inaccurate quotes provided by the agent or broker. Any discrepancies should be reported to the auto plan and the Department of Financial Services.

Coverage Options in the Auto Plan

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Through the auto plan, consumers can obtain various auto insurance coverages, including:

• The minimum limits required by law for bodily injury and property damage liability, basic no-fault, and uninsured motorist insurance.
• Optional upper limits for bodily injury liability (up to $250,000/$500,000) and property damage liability (up to $100,000).
• Higher no-fault aggregate limits (up to $125,000) with optional additional PIP limits of $25,000 and $50,000.
• Optional lump sum coverage (up to $250,000/$500,000).
• Spousal liability coverage included within vested bodily injury limits.
• Optional physical damage coverages (collision and comprehensive) up to $50,000, with different deductible options.
• Mandatory car rental coverage.

Moving Out of the Auto Plan

If your auto insurance coverage is underwritten through the auto plan, the insurer must provide coverage for three years before they can deny the renewal of your policy. However, at the end of this three-year period, you have the option to purchase a policy from the voluntary marketplace or reapply for the auto plan. It’s generally recommended to explore options in the voluntary market, as there is no requirement for you to stay in the car plan, and you will likely find better deals. If you discover an insurer in the voluntary market willing to cover you, you can switch from your auto plan policy to the new company without incurring a “short rate” cancellation fee.

Finding the Right Auto Insurance Coverage

Don’t let the challenges of finding auto insurance coverage discourage you. Whether you’re working with an agent, broker, or directly with the auto plan, there are options available to ensure you receive the coverage you need. Keep exploring and comparing different insurance providers until you find the policy that best suits your requirements. Remember, everyone deserves to be protected on the road, and with determination and patience, you’ll find the right coverage for your needs.

Source: https://amajon.asia
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