New York’s car insurance costs are driven by a structural mismatch between who must buy coverage and how much coverage they receive. The worst drivers face very high premiums to stay insured, yet they are limited to basic minimum liability amounts for property damage and personal injury. This leaves victims potentially without adequate protection in fatal or injury-causing crashes. Raising minimums could improve victim coverage, but experts warn it could push some drivers out of the market and increase uninsured driving. High-risk drivers are often denied by most insurers due to records, so the state assigns them to an assigned risk pool that insurers must cover. Premiums for this minimum coverage can reach about $1,000 per month.
"In New York, the insurance system faces a structural issue: In order to keep driving, the worst drivers must pay very high insurance premiums, but they only get the bare minimum in coverage: $10,000 in liability coverage for property damage, $25,000 for injuring one person and $50,000 per incident. As a result, the worst drivers - the ones most likely to get into a fatal or injury-causing crash - don't have enough coverage."
"Raising these minimums could make sure victims are covered, but experts say that doing so would push some people out of the market entirely, ironically creating more uninsured drivers. Experts say it's a symptom of an industry that isn't really looking out for people, and the state Legislature's disastrous attempts to reform the system this year represented a fear of taking on that industry."
""The system itself is based on wealth extraction rather than fairness," said Chuck Bell, advocacy programs director at Consumer Reports. "So I don't know it would be easy for the governor to change it, because I'm sure she'd be afraid, [and] they should be afraid, of backlash.""
"New York's worst drivers are often denied coverage from most carriers because their driving records carry too much risk, but it is illegal to drive without insurance in New York, so New York created a database of such drivers called the assigned risk pool. Drivers in that category are divided among the insurance companies, which must insure these drivers as a condition of operating in the state."
Read at Streetsblog Empire State
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