Car insurance is a legal requirement in many states. It is necessary to protect the financial interests of drivers in case of accidents, theft, or unexpected damages. Understanding the different types of policy coverage available is very important for drivers.
In a metropolitan area like New York, knowing what is included in each cover will help you make an informed decision when choosing a policy.
A minimum auto insurance coverage in New York is put in place to ensure basic protection for drivers and other road users.
This article will discuss 4 types of insurance coverage that are included in a standard policy.
Liability Coverage
Liability insurance coverage is the foundation of most insurance policies and is required by law in New York State. This coverage is designed to protect you if you are at fault in an accident. It covers property damage and injuries sustained by others.
There are two main parts of liability coverage:
- Bodily Injury Liability: It covers medical expenses, lost wages, funeral costs, and legal expenses another driver incurs because of you.
- Property Damage Liability: Pays for the repair or replacement of property damaged in an accident, like vehicle repair, fences, and buildings.
According to New York’s Vehicle and Safety Law, drivers are required to carry a minimum liability coverage of:
- $25,000 per person for bodily injury not resulting in death
- $50,000 for bodily harm that leads to death for any one person in an accident
- $50,000 per accident for bodily injury
- $10,000 per accident for property damage
These are just the minimum requirements, but drivers can opt for higher premiums to protect their assets.
Uninsured/Underinsured Motorist Coverage
Uninsured/ Underinsured motorist coverage (UM/UIM) comes in handy when the at-fault driver does not have insurance or their coverage is not enough to pay for your damages. This policy helps to ensure that in the event of an accident, drivers are not left paying for expenses from their pockets.
UM/UIM is very important in hit-and-run accidents where the person responsible cannot be identified. It also protects your passengers in case of injury and property damage. In New York, UM (Uninsured Motorist) coverage is mandatory. However, UIM (Underinsured Motorist) is optional and available upon request at an extra premium charge.
Personal Injury Protection Insurance (PIP)
PIP, also called “no-fault” insurance, covers medical costs and other expenses for the driver and passenger after an accident. In the state of New York, which uses a no-fault law, having PIP is very important.
PIP also covers lost wages and death benefits for funeral expenses. Additionally, if you are unable to perform household duties like childcare because of injuries, PIP will cover the costs of such tasks.
For example, if you are unable to work after a car accident, PIP can help cover lost income. Generally, this is a good cover for anyone who wants peace of mind knowing they will have financial support after an accident.
Medical Payments Coverage
Medical payment coverage, commonly known as “MedPay,” is an insurance policy that pays for you and your passenger’s medical expenses after an accident, even if you are at fault. In New York, MedPay is optional. It can be used to supplement other health insurance policies by covering things that would sometimes be out-of-pocket expenses, like:
- Ambulance fees
- Co-pays
- Deductibles
MedPay also comes in handy in situations where your health insurer doesn’t cover accident-related expenses. However, unlike PIP, MedPay is for medical expenses and doesn’t include lost wages.
Conclusion
These are some of the main types of car insurance coverage every New York driver should know about. In a city where there are around 100,000 car accidents every year, understanding how a certain cover will protect you ensures you are well protected in particular situations. When choosing a certain cover, remember to evaluate your needs and finances.
Table of Contents