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Insurance Requirements

Driving a car may seem innocent enough, but it's actually dangerous business. Like almost all states, New York requires its citizens to be responsible for the damages they could cause in an auto accident. Here’s how auto insurance makes that easier: Insurance companies agree to cover losses that you are liable for as a result of an accident. In exchange, you pay them a sum called a premium. New York requires that you carry some specific types of insurance in order to be in compliance with state law. 

First, you have to have bodily injury liability coverage with limits of at least $25,000/person and $50,000/accident. New York also requires you to carry property damage liability coverage with at least a $10,000 limit and Basic Personal Injury Protection. There are other types of optional coverages available, too, and of course you can also get higher coverage limits if you desire. 

In New York, it’s not enough for you to have a valid insurance policy, pay your premium, and keep your insurance card in your car. The DMV has a system called the Insurance Information and Enforcement (IIE) system, and your insurance company must use this system to notify the DMV electronically that your policy is in force. Usually, they do this as soon as you start a policy, add a new vehicle, take a vehicle off, or cancel your policy. In order to be in compliance with New York law, you must have insurance for the whole time your vehicle is registered. Even if you aren’t driving the car or the car isn’t running, if it has a valid license plate you need to keep it insured or the DMV will penalize you. They could not care less if it’s actually being driven or not. If you don’t turn in the tags, they will assume you are driving it. 

The IIE system is designed to catch people who let their insurance coverage lapse. However, it also “catches” people who are actually insured. Here’s where it gets sticky…all of the information that the insurance company sends has to match what the DMV has on file exactly. That means that your name has to appear on your policy exactly the same way it appears on your vehicle registration, or the DMV will come after you for not having insurance. Even something as tiny as a missing middle initial can throw the system off. If you receive a letter from the DMV about your insurance, make sure to contact your insurance company immediately. You really can’t afford to wait. If the filing isn’t fixed quickly, the DMV will move to suspend your plates and then your license. It won’t do any good to take them your insurance card, either. Having the insurance filed correctly through the DMV’s system is the only way to fix the problem.

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