New York Car Insurance: How to Get the best Deal

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New York Car Insurance is affected by NY state laws and your search for the best deal should start with an understanding of some key provisions of the law. For example, liability coverage in the state has a liability minimum of 25/50/10, i.e. in NY you cannot opt for a lower coverage.

The cryptic numbers above indicate the coverage offered. 25/50/10 means that the insurer will pay a maximum of $25,000 per injured person, $50,000 for all related injuries and $10,000 for property damage. You will receive payments for treating bodily injuries in the accident until the maximum of $50,000 is reached.

Note that if the accident occurred because of your fault, and if the costs of the bodily injuries exceeded $50,000 in the above scenario, you might face a lawsuit for the costs not covered by the insurance.

You should ideally go for a higher liability coverage such as 100/300/50, which means that you can get $100,000 to treat the bodily injuries of each person, $300,000 for all related injuries and $50,000 to cover property damage. Going for the legally minimum coverage is an extreme step, so to say.

Liability Coverage and Premium Amounts

You might think that the steep increase in coverage will involve a similar increase in premium, and you will think wrong. The increase in premiums will typically be nominal considering the coverage enhancement alone. Rather than the amount of coverage, it might be other factors that finally determine the premium you pay.

The insurance company is seeking to minimize the risk involved in each policy they issue. Any factors that give greater confidence to the company that the risk is less can result in a lower premium in a competitive insurance market.

While the insurance company looks at things broadly along the above lines, you can look at it from a different perspective, as we discuss in the following sections.

What Factors Affect the Premiums?

There are probably a thousand and one factors that determine the premium.

One major factor is the amount you are willing to pay from your own pocket in the case of accident. This amount, known as ‘Deductible’ in insurance lingo, will be deducted from the actual costs that the insurance company will pay. For example, if you opt for a Deductible of $1,000, and an accident costs $20,000, the insurance company will pay only $19,000.

The deductible applies to each accident and not all accidents during a particular policy’s coverage. The $1,000 will be deducted from each claim you make.

While increasing the deductible can reduce the premium to some extent, it might not be the wisest choice in all cases. For example, you might save about $100 in premium by going in for a $1,000 deductible as compared to $500 deductible. However, even if a single accident costing over $1,000 occurs during a five year period, your premium savings will be more than wiped out.

One practice that can land you in trouble is going for a higher deductible to save on premium, and then failing to report the smaller accidents to the insurance company (any accidents reported can result in significant hikes in premium rates). You might think that overall, you can save money in this way.

There are two major problems with this scenario. One, you cannot legally keep any accident secret from your insurer. Two, if other parties are involved or the accident is reported to the police, keeping it secret is unlikely to work.

Getting Discounted Premiums

Speaking of factors that affect premium amounts, do you know that you can get discounted premiums if you do certain things? For example:

  • Insure more than one car under the same policy
  • Obtain more than one type of insurance from the same company, say homeowner and auto insurance
  • Bring certain things, such as the superior safety features of your car, or the fact that you have undergone training that minimize the chances of accidents during driving, to the attention of the insurance company

See if you can quality for any such discount by discussing the things that qualify for a discount.

Comparison Shopping for Auto Insurance

Comparing auto insurance premiums is not like comparing the prices of two branded products with clearly specified features. In the latter case, you are clearly told the features that come with each choice. That might not be the case with liability coverage.

Insurance companies can work with policy terms and conditions that enable them offer lower rates. All comparisons will necessarily have to involve understanding the implications of the policy conditions, and comparing the conditions offered by different policies. Otherwise, you might get a lower premium and find that you have lost out on some other front.

The conditions might even be altered in small ways you might not notice, say by eliminating coverage for incidentals, such as the cost of towing the car involved in an accident.

Your best option is to list all the things you want to be covered, and then check whether these are covered in all the policies you are comparing. The rate comparison will then be more meaningful. Just make sure that you know what items can be covered under an auto policy.

When you have finally come to a tentative decision on which insurer to select, do a credit check on that company before you accept their offer. Even the best of terms can be worthless if the company is not financially sound. And try to find out what kind of customer service the company offers (preferably by talking to their existing customers).

You can also tell your existing insurer that you are moving your custom to a lower priced coverage, and see whether they can match the offer.

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