In New York, there are extensive requirements for auto insurance. Drivers in the Empire State must carry liability insurance. This coverage is designed to pay for bodily injury or property damage caused by another driver. However, it does not provide compensation for the insured driver’s own vehicles. Thankfully, collision coverage can provide an insured driver with compensation for their own losses. This form of insurance is not required under New York law, however. So, is it worth it? Before you can make that determination, it helps to understand what collision coverage is and what New York requires motorists to carry.
New York Insurance Requirements
The insurance requirements for motorists in New York are set out by the Department of Motor Vehicles. According to state law, you must maintain a minimum level of car liability insurance. If you fail to do so, the state can suspend your vehicle registration as well as your driver’s license.
The amount of liability insurance required includes:
- At least $10,000 for property damage
- At least $25,000 for bodily injury per person
- At least $50,000 for the death of a person
- At least $50,000 for bodily injury for two or more people
- At least $100,000 for the death of two or more people
These amounts are the bare minimum required. For many drivers, maintaining a higher rate of insurance makes sense. These policies remain in effect no matter how much you drive, and the policies must be issued in the name the car is under.
While New York applies strict requirements on liability insurance, they do not require most drivers to carry collision insurance. If you are leasing your vehicle, your lender may require you to carry this insurance. Although this insurance is optional for most people, it has some important benefits for a driver.
What is Collision Coverage?
Unlike liability insurance, which compensates other drivers for accidents you cause, a collision policy covers your own damages in an accident. Specifically, it pays to repair or replace your vehicle if it strikes another vehicle or even a fixed object. This coverage will not pay for your medical bills or any other person’s damages in a crash.
Is Collision Coverage Worth it?
The decision of whether or not you need collision coverage is up to you. However, there are some basic concepts to keep in mind when making this decision. First and foremost, a collision policy will never pay more than the vehicle is worth. While this makes little difference for newer cars, older cars often see their value diminish significantly. This is important when considering the second important concept: you have to pay a deductible if you file a claim. This deductible is often as much as $1,000. While that might seem a small price to pay for a vehicle worth $30,000, it makes little financial sense for a car worth $800.
All things equal, collision coverage is helpful. Ultimately, whether or not these policies make sense for you depends if the numbers add up in your favor. If the deducible for filing a claim costs more than your car is worth, these policies are not worth it. You are unlikely to benefit from a policy if the vehicle is only worth a small bit more than the deductible, as well. If you file a claim, the net result might be a few hundred dollars. This will not even offset the increased insurance rates you are likely to face.
For newer cars, however, collision coverage can make sense. If the potential payout on a collision coverage policy is far more than what you owe on the vehicle, it is worth obtaining a policy. Keep in mind that these policies are typically for six months at a time, so you can always cancel as the value of your vehicle drops.
How a Car Accident Lawyer Could Help
If you were involved in an accident and do not have collision insurance, your next best option could involve working with a New York car accident lawyer from Douglas & London. If another person is responsible for the crash, your attorney could file a lawsuit on your behalf seeking monetary compensation for your vehicle damage. To learn more, contact Douglas & London right away to schedule your free consultation.