What are the most frequently asked questions about auto insurance?


Almost all states in the US have made auto insurance mandatory and there is a prescribed limit of insurance coverage that one must carry.  However, more than anything else everyone must understand that it is in their interest that they will have to carry insurance and not merely because it has been made compulsory by the state.

People are generally aware of insurance but there are many who might not be too familiar with auto insurance or how to go about it.  Here are a few frequently asked questions that we have addressed to make things easier.

What is the amount of insurance coverage that one must carry?

–          As per the laws in the State of New York motorists are expected to carry a minimum liability insurance of $25,000 which is for bodily injury per person and $50,000 for bodily injury for all persons, as well as $10,000 which is for property damage in the accident.  A ‘no fault’ cover of $50,000 is also mandatory.  However, most motorists carry extra coverage for liability as well as personal injury protection that are beyond the prescribed minimum.  As per the law uninsured motorists are provided coverage for bodily injury by all auto insurance policies and are subject to the same minimums.

Can an insurance company cancel the policy?

–          The policy may be canceled under certain circumstances such as a new policy may be canceled within the 60-day period and may be subject to the established guidelines that need not be filed with the Insurance Department.  Other than this the policy may be canceled during mid term for very specific reasons such as a suspension of the driver’s license of the insured or a member of a family who might operate the vehicle under the policy.  The license may be suspended if there are any misrepresentations or fraud of any kind involved while obtaining the policy or while making a claim.  Non-payment of premiums could also lead to cancellation of a policy.  However, there are some additional criteria on the NYAIP policies with regard to cancellation.

Do insurance rates vary depending on where I live?

–          Insurance policies as well as rates may vary from state to state and even policies will vary from one insurer to another.  These insurance rates are based on the company’s underlying costs that include many factors such as claims and their severity, traffic patterns, demographics, population, as well as costs of goods and services etc.