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Basic steps for acquiring insurance from car insurance companies in New York

An examination of auto insurance in New York basics should include a look at the different types of auto insurance. Accident coverage is the total coverage for a single accident. Injury liability insurance generally refers to coverage against injuries that are a direct result of an accident. Property liability coverage applies to damages or theft of the covered vehicle, and also pays for damage to other property.

There are three general steps that you will need to complete in order to obtain car insurance for New York:

1. Find the government department that regulates New York auto insurance companies. This agency will serve as a central location for many resources on auto insurance.
2. Determine the auto insurance requirements for New York. Many drivers will choose to obtain only the minimum insurance that New York requires, especially if their car loan has been paid off.
3. Get a quote for auto insurance. There are a large number of auto insurance agencies in New York and multiple quotes will help establish a likely range for a given coverage.

Locate government agencies that deal with NY auto insurance

New York regulates auto insurance, as well as other types of insurance, at the state level. State laws on insurance specify issues such as the insurance coverage requirements, proof of financial responsibility and the licensing requirements for insurance agents.
Try: The New York State Insurance Department is responsible for all types of insurance in New York and provides a FAQ on New York auto insurance laws. The New York State Department of Motor Vehicles provides extensive information on New York car insurance requirements.

Find out the minimum coverage limits for New York state car insurance

Insurance agencies frequently provide a summary of the types and amounts of auto insurance that New York requires. Other organizations also may provide quick facts on auto insurance requirements in New York.
Try: Insurance USA provides detailed information on the amounts of car insurance that New York requires. USInsuranceOnline.com offers the coverage limits for New York auto insurance, in addition to other specific information on New York car insurance rates.

Get New York auto insurance quotes

You can easily obtain quotes for New York car insurance over the phone or through email. Most insurance companies will require you to complete a short questionnaire on your vehicle, insurance needs and driving habits.
Try: New York Car Insurance begins its application process for a quote with your zip code.Esurance.com provides auto insurance in New York, as well as other types of insurance.

• New York auto insurance agencies frequently express insurance requirements as a/b/c where the letters a, b and c represent the different types of coverage needed in thousands of dollars. The letter "a" is the bodily injury liability, "b" is the coverage per accident and "c" is the property damage liability. For example, 25/50/10 coverage means that the policy covers $25,000 per injured person up to a total of $50,000 for the accident with additional coverage of $10,000 for property damage.

By Emmet McMahan

Extracted from: http://www.business.com/guides

US Car Insurances

The regulations for vehicle insurance differ with each of the 50 U.S. states and other territories (see separate main article).

[edit]Coverage levels

Vehicle insurance can cover some or all of the following items:

• The insured party (medical payments)
• The insured vehicle (physical damage)
• Third parties (car and people, property damage and bodily injury)
• Third party, fire and theft
• In some jurisdictions coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance)

Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.

[edit]Excess

An excess payment, also known as a deductible, is a fixed contribution that must be paid each time a car is repaired with the charges billed to an automotive insurance policy. Normally this payment is made directly to the accident repair "garage" (the term "garage" refers to an establishment where vehicles are serviced and repaired) when the owner collects the car. If one's car is declared to be a "write off" (or "totaled"), then the insurance company will deduct the excess agreed on the policy from the settlement payment it makes to the owner.

If the accident was the other driver's fault, and this fault is accepted by the third party's insurer, then the vehicle owner may be able to reclaim the excess payment from the other person's insurance company.

[edit]Compulsory excess

A compulsory excess is the minimum excess payment the insurer will accept on the insurance policy. Minimum excesses vary according to the personal details, driving record and insurance company.

[edit]Voluntary excess

To reduce the insurance premium, the insured party may offer to pay a higher excess (deductible) than the compulsory excess demanded by the insurance company. The voluntary excess is the extra amount, over and above the compulsory excess, that is agreed to be paid in the event of a claim on the policy. As a bigger excess reduces the financial risk carried by the insurer, the insurer is able to offer a significantly lower premium.

[edit]Basis of premium charges

Main article: auto insurance risk selection

Depending on the jurisdiction, the insurance premium can be either mandated by the government or determined by the insurance company, in accordance with a framework of regulations set by the government. Often, the insurer will have more freedom to set the price on physical damage coverages than on mandatory liability coverages.

When the premium is not mandated by the government, it is usually derived from the calculations of an actuary, based on statistical data. The premium can vary depending on many factors that are believed to have an impact on the expected cost of futureclaims.^[15] Those factors can include the car characteristics, the coverage selected (deductible, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven).^[16]

[edit]Gender

Men average more miles driven per year than women,^{[citation needed]} and have a significantly higher rate of accident involvement.^[17]

On 1 March 2011, the European Court of Justice controversially decided insurance companies who used gender as a risk factor when calculating insurance premiums were breaching EU equality laws.^[18] The Court ruled that car-insurance companies were discriminating against men, and these practices had to stop.^[18]

[edit]Age

Teenage drivers who have no driving record will have higher car insurance premiums. However, young drivers are often offered discounts if they undertake further driver training on recognized courses, such as the Pass Plus scheme in the UK. In the U.S., many insurers offer a good-grade discount to students with a good academic record and resident-student discounts to those who live away from home. Generally insurance premiums tend to become lower at the age of 25. Some insurance companies offer "stand alone" car insurance policies specifically for teenagers with lower premiums. By placing restrictions on teenagers' driving (forbidding driving after dark, or giving rides to other teens, for example), these companies effectively reduce their risk.^[19] A teenager driving a safer car, such as a sedan rather than a flashy sports car, can also get lower insurance rates.^[20] Senior drivers are often eligible for retirement discounts, reflecting the lower average miles driven by this age group. Rates may increase for senior drivers after age 65, due to increased risk associated with much older drivers. Typically, the increased risk for drivers over 65 years of age is associated with slower reflexes, reaction times, and being more injury-prone as a result of aging.^{[citation needed]} Additionally, older drivers between the ages of 60 and 70 in the U.S. must be able to demonstrate competency in order to retain a driver's license.^[21]

[edit]Driving history

In most states, moving violations, including running red lights and speeding, assess points on a driver's driving record. Since more points indicate an increased risk of future violations, insurance companies periodically review drivers' records, and may raise premiums accordingly. Laws vary from state to state, but most insurers allow one moving violation every three to five years before increasing premiums. Accidents affect insurance premiums similarly. Depending on the severity of the accident and the number of points assessed, rates can increase by as much as twenty to thirty percent.^[22] Any motoring convictions should be disclosed to the insurers, as the driver is assessed by risk from prior experiences while driving on the road.

[edit]Marital status

Policy owners who are married often receive lower premiums than single persons. One reason is that marriage may be considered an indicator of stronger financial stability within the household.

[edit]Vehicle classification

Two of the most important factors that go into determining the underwriting risk on motorized vehicles are: performance capability and retail cost. The most commonly available providers of auto insurance have underwriting restrictions against vehicles that are either designed to be capable of higher speeds and performance levels, or vehicles that retail above a certain dollar amount. Vehicles that are commonly considered luxury automobiles usually carry more expensive physical damage premiums because they are more expensive to replace. Vehicles that can be classified as high performance autos will carry higher premiums generally because there is greater opportunity for risky driving behavior. Motorcycle insurance may carry lower property-damage premiums because the risk of damage to other vehicles is minimal, yet have higher liability or personal-injury premiums, because motorcycle riders face different physical risks while on the road. Risk classification on automobiles also takes into account the statistical analysis of reported theft, accidents, and mechanical malfunction on every given year, make, and model of auto.

[edit]Distance

Some car insurance plans do not differentiate in regard to how much the car is used. There are however low-mileage discounts offered by some insurance providers. Other methods of differentiation would include: over-road distance between the ordinary residence of a subject and their ordinary, daily destinations.

[edit]Reasonable distance estimation

Another important factor in determining car-insurance premiums involves the annual mileage put on the vehicle, and for what reason. Driving to and from work every day at a specified distance, especially in urban areas where common traffic routes are known, presents different risks than how a retiree who does not work any longer may use their vehicle. Common practice has been that this information was provided solely by the insured person, but some insurance providers have started to collect regularodometer readings to verify the risk.

[edit]Odometer-based systems

Cents Per Mile Now^[23](1986) advocates classified odometer-mile rates, a type of usage-based insurance. After the company's risk factors have been applied, and the customer has accepted the per-mile rate offered, then customers buy prepaid miles of insurance protection as needed, like buying gallons of gasoline (litres of petrol). Insurance automatically ends when the odometer limit (recorded on the car's insurance ID card) is reached, unless more distance is bought. Customers keep track of miles on their own odometer to know when to buy more. The company does no after-the-fact billing of the customer, and the customer doesn't have to estimate a "future annual mileage" figure for the company to obtain a discount. In the event of a traffic stop, an officer could easily verify that the insurance is current, by comparing the figure on the insurance card to that on the odometer.

Critics point out the possibility of cheating the system by odometer tampering. Although the newer electronic odometers are difficult to roll back, they can still be defeated by disconnecting the odometer wires and reconnecting them later. However, as the Cents Per Mile Now website points out:

As a practical matter, resetting odometers requires equipment plus expertise that makes stealing insurance risky and uneconomical. For example, to steal 20,000 miles [32,200 km] of continuous protection while paying for only the 2000 in the 35000 to 37000 range on the odometer, the resetting would have to be done at least nine times, to keep the odometer reading within the narrow 2,000-mile [3,200 km] covered range. There are also powerful legal deterrents to this way of stealing insurance protection. Odometers have always served as the measuring device for resale value, rental and leasing charges, warranty limits, mechanical breakdown insurance, and cents-per-mile tax deductions or reimbursements for business or government travel. Odometer tampering, detected during claim processing, voids the insurance and, under decades-old state and federal law, is punishable by heavy fines and jail.

Under the cents-per-mile system, rewards for driving less are delivered automatically, without the need for administratively cumbersome and costly GPS technology. Uniform per-mile exposure measurement for the first time provides the basis for statistically valid rate classes. Insurer premium income automatically keeps pace with increases or decreases in driving activity, cutting back on resulting insurer demand for rate increases and preventing today's windfalls to insurers, when decreased driving activity lowers costs but not premiums.

[edit]GPS-based system

In 1998, the Progressive Insurance company started a pilot program in Texas, in which drivers received a discount for installing a GPS-based device that tracked their driving behavior and reported the results via cellular phone to the company.^[24]Policyholders were reportedly more upset about having to pay for the expensive device than they were over privacy concerns.^[25] The program was discontinued in 2000.

[edit]OBDII-based system

The Progressive Corporation launched Snapshot to give drivers a customized insurance rate based on recording how, how much, and when their car is driven.^[26] Snapshot is currently available in 38 U.S. states.^[26] Driving data is transmitted to the company using an on-board telematic device. The device connects to a car's OnBoard Diagnostic (OBD-II) port (all petrol automobiles in the USA built after 1996 have an OBD-II.) and transmits speed, time of day and number of miles the car is driven. There is no GPS in the Snapshot device, so no location information is collected. Cars that are driven less often, in less-risky ways, and at less-risky times of day, can receive large discounts. Progressive has received patents on its methods and systems of implementing usage-based insurance and has licensed these methods and systems to other companies.

[edit]Credit ratings

Insurance companies have started using credit ratings of their policyholders to determine risk. Drivers with good credit scores get lower insurance premiums, as it is believed that they are more financially stable, more responsible and have the financial means to better maintain their vehicles. Those with lower credit scores can have their premiums raised or insurance canceled outright.^[27] It has been shown that good drivers with spotty credit records could be charged higher premiums than bad drivers with good credit records.^[28]

[edit]Behavior-based insurance

The use of non-intrusive load monitoring to detect drunk driving and other risky behaviors has been proposed.^[29] A US patent application combining this technology with a usage based insurance product to create a new type of behavior based auto insurance product is currently open for public comment on peer to patent.^[30] See Behavior-based safety