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Collision Insurance Coverage in New York

Insurance can be confusing, leading to a lot of different questions. Collision insurance is a type of insurance coverage that provides better coverage than liability but less insurance than full coverage policies. It is often a lower cost option than full coverage but may require a secondary policy called gap insurance.

Driving in New York can be one of the most difficult tasks because of the sheer number of vehicles on the road there. The more drivers, the more likely that you are to be involved in an accident of some kind.

How Much Does Collision Insurance Cover on My Vehicle? Collision Insurance Coverage in New York

The amount of coverage that you will get from collision insurance will depend on the fair market value of the vehicle. That amount is often determined by using the book value of the car and may also involve using local dealer appraisals and estimates of value of the type of car. Because a car can be in different conditions even when they are the same make, model and year, most books will list a price for poor, fair and excellent conditions.

Repairs on my car were estimated at $5,000, but the insurance company only sent a check to the garage for $4,000. Why is that?

On your insurance policy, you probably have a deductible, an amount that is your own responsibility before the insurance kicks in. The higher this deductible amount is, the lower your insurance premium may potentially be.

This is the reason why it is so vitally important to understand the terms of your insurance before you sign on the dotted line or pay your first premium. You can change the amount of your deductible keeping in mind that the amount can change your premium.

My car was totaled in an accident. The collision insurance amount was determined to be $7,500 total. There is an outstanding loan on this vehicle for $9,500. Now what do I need to do?

In the case where there is an outstanding loan amount remaining, you would be responsible for that amount unless you have a special kind of insurance called gap insurance. That insurance coverage will pay the remaining amount after the collision insurance has totaled out so that you do not have to pay it out of your own pocket.

Is collision insurance a legal requirement?

There are no states in the US that require collision insurance because it is coverage that is over and beyond liability. Liability insurance is required in virtually every state to protect the drivers and their property. However, even though there are no states that require collision insurance, you may be required to have it if you have a lease or a loan on that vehicle to protect the finance company’s interest. You will typically be required to continue that coverage until the full amount of the loan has been satisfied. The finance company may require proof of insurance on a rotating basis.

All states, including New York, require proof of financial responsibility. For as long as your vehicle is registered in that state, you will have to have valid New York insurance even if you are out of the state. If the registration is in the state, the insurance must be from that state as well.

What if I have special additions to my vehicle?

Special additions to your vehicle, such as modifications to its interior, appearance or performance are time consuming and can be very expensive to install. They can also change the value of your car, with the exception of the period during a loss. The insurance company will not use those special modifications to determine the value of your vehicle for insurance purposes. However, you can use either a gap policy or a special insurance coverage policy to make up the difference for those expenses. Some examples of these additional costs that you might want to cover include:

  • Stereo and other audio equipment
  • Security equipment
  • Specialized paint jobs, decals or stickers
  • Specialized equipment installed for personal use and mobility

Special Note:  Covering the cost of certain types of decals, for example those used to advertise your business or company name, may better be covered by using insurance coverage such as commercial insurance rather than relying on gap insurance and collision coverage.

How do I know that I have gotten the best coverage at the best price?

As with any other type of insurance coverage, the first step to getting good collision insurance coverage is by getting a number of insurance quotes. It is a simple process that will only take a few minutes and could save you hundreds of dollars on your policy. The amount of money that you are going to pay on insurance is enough that it is really worth the investment of your time to get the best price possible.

In addition to discussing insurance coverage during your quotes, it is important to look at insurance discounts that might be available to you. Those can really add up and can include:

  • Paperless discount (saves the company money)
  • Paid in full discount
  • Multiple policy discount
  • Loyalty discount
  • No claims discount
  • Good student discount

There are a number of insurance companies that offer additional insurance discounts for certain types of professions including teachers, police officers, medical professionals and veterans.

My insurance company does not offer loyalty discounts but they are conveniently located, should I change carriers?

Convenience is not always the most important feature these days. In the past, when you had to go to the office to pay your insurance, that was something important however, many people take advantage of the other methods of payments instead. Most people can pay their insurance using an electronic check, debit or credit card over the phone, by mail or on the internet. Make sure that you are not making these changes in insurance coverage without ensuring that you are still covered. Any gaps in coverage can affect the cost of your new policy and may result in a suspension of your New York driver’s license or removal of your license plates.

Before you change insurance policies, consider the cost of the coverage and the service that you currently have. If you are satisfied with both, it might be wise to ask the insurance agency if there are any additional discounts that they can offer you, suggesting that you might be shopping around for better prices. They may surprise you with additional discounts if they possibly can.

I was just involved in an accident, what should I do?

If you are involved in an accident, your first step should always be to make sure that everyone is safe and secure. Take photos of the accident, the vehicles and the scene if possible. (If you do not have your cell phone with you, it is a smart idea to keep a disposable camera in your glove box in case of accidents.)  If possible, move all vehicles out of the roadway as much as possible and then call the police and emergency crews if they are needed.

Exchange insurance information with the other party, if there is one, but do not volunteer your assessment of the accident or who is at fault. Get all of the necessary information from the police regarding the police report and then call your insurance agent for your next steps.

Some insurance agencies would like to be notified while police are at the scene and may come to the accident scene in person if they are local.