many insurers write auto insurance in new york state. When shopping for auto insurance, remember that if one or two agents or brokers can’t find coverage for you, it doesn’t mean there isn’t an insurer willing to voluntarily insure you. No insurance agent or broker will have contractual relationships with all auto insurers doing business in New York. you should ask the particular agent or broker to identify the specific auto insurance companies they have access to.
However, if you can’t find an auto insurance company that will sell you an auto policy with the required coverages you need or want, the new york auto insurance plan (nyaip), commonly known as a automobile or assigned risk plan, is a special insurance facility established under new york state law to ensure coverages are provided. Most agents and brokers licensed to write car insurance policies are certified to write coverage through the car plan.
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If you can’t locate a certified broker or agent, you can get help finding one by contacting the auto insurance plan directly at (212)943-5100 or through the nyaip website.
New York’s voluntary auto insurance market is competitive and provides coverage to those consumers an insurance company believes it can insure at a reasonable profit. Historically, most auto insurers wrote business that was preferred (better than average) or standard (average).
There are a number of insurers that specialize in insuring drivers who previously would not have found coverage outside of the (non-standard) car plan, due to one or more underwriting factors (driving history, vehicle age, being a newly licensed driver, etc.). Many insurers use “multi-tier” rating programs, in which more than one rate tier can be established within the same company. to be approved, the program has to be structured to encourage the movement of drivers outside the car plan. Under these programs, insurers broaden their underwriting guidelines and place policyholders in qualifying “tiers” with others who have similar characteristics.
At the time of renewal, the experience and characteristics of the insured are re-evaluated to determine if they qualify to move to a different level. If her insurer uses a multi-tier classification structure, she should have received a disclosure notice that describes her program, and her policy declarations page should indicate in which tier her policy is classified. however, as a last resort, the residual market (the auto plan) remains available to cover consumers who have been declined coverage in the voluntary market.
Premiums for auto plan coverage are generally higher, because the overall loss experience for this group of drivers has been consistently worse compared to the voluntary market. however, under the rules of the car plan, drivers are eligible for a “careful driver” discount if they have been accident-free and conviction-free for at least one year on the car plan and have at least four years of driving experience licensed.
When an application is submitted through the auto plan, it will be assigned to a particular insurer among the many auto insurers that do business in New York State. The premium for an auto plan policy should be the same regardless of which insurer your application is assigned to and which agent or broker handles your application. You should be careful if you get different quotes for an auto plan policy. There have been cases where an agent or broker “takes little” by intentionally quoting a lower premium to get the business. Please note that the insurer is not liable for inaccurate quotes by the agent or broker, which should be reported to the auto plan and department.
Consumers can get the following auto insurance coverages through the auto plan:
- the minimum limits required by law for bodily injury and property damage liability, basic no-fault and uninsured motorist insurance;
- optional upper limits of up to $250,000/$500,000 bodily injury liability and up to $100,000 property damage liability;
- upper limits of $25,000 and additional pip limits of $50,000, resulting in higher no-fault aggregate limits up to $125,000 on an optional basis;
- optional lump sum coverage up to $250,000/$500,000;
- optional supplemental spousal liability coverage included within vested bodily injury limits;
- optional physical damage coverages (collision and comprehensive) up to $50,000, with various deductible options; and
- mandatory car rental coverage.
In the event that your auto insurance coverage is underwritten through the auto plan, the insurer that issues your policy must insure you for three years before you cannot renew your policy (unless you wish to underwrite renewal voluntarily).
At the end of this three-year period, you can purchase a voluntary marketplace policy or reapply for the auto plan. however, there is no requirement for you to stay in the car plan, and you will generally be better off in the voluntary market. If, at any time, you find an insurer in the voluntary market that is willing to cover you, you can drop your coverage with the auto plan insurer and get coverage from the new company. the “short rate” cancellation fee is waived if you cancel an auto plan policy in this situation.