The Empire State requires motorists to maintain some of the most extensive auto insurance coverage in the nation, and also some of the most expensive. But not all drivers will be able to obtain a policy in the voluntary market due to the perceived risk that insurers may have of them and the increased likelihood of suffering a loss. The New York Automobile Insurance Plan (NYAIP) is a mechanism that allows such individuals to obtain coverage by assigning them to a carrier on an involuntary basis.
All New York auto insurance companies must participate in the NYAIP by issuing coverage to assigned motorists. In addition, all licensed agents and brokers conducting business in the state must be certified by the Superintendent of Insurance prior to submitting applications to the plan.
In order for motorists to obtain coverage through the NYAIP they must be able to prove that they have been unable to obtain a policy in the voluntary market within the past 60 days. Once assigned to carriers, coverage must be provided for no less than 3 years.
Who Needs the NYAIP
There are a number of reasons why a driver may need assistance getting insured through the New York Automobile Insurance Plan, and it is mainly due to the risk involved with insuring the particular individual. If a company feels that an applicant cannot be insured at a profit they may turn the driver away. This is usually because of one of the following items:
- Poor driving history
- Lack of driving experience
- Claims frequency
Motorists should keep in mind that these policies are often more costly than those provided in the open market and may want to apply to the plan as a last resort. Taking the time to shop around could lead a New Yorker to more affordable options.
Why Rates are Higher with the New York Automobile Insurance Plan
According to data in regards to loss experience with the group of drivers who would need to utilize the NYAIP, the losses and cost of claims has been worse on a consistent basis than the losses that occur to those that are insured in the voluntary market.
Getting Out of the Plan
Although safe driving is always encouraged, it can also lead to motorists receiving cheaper car insurance rates and eliminate the need of the assistance of the NYAIP. For those with a lack of experience or a poor driving history, keeping a clean record for a period of 3 years will usually translate into the ability to find a carrier that will voluntarily insure them.
Additionally, the state encourages consumers to shop around periodically to see if a company has become available with more affordable rates than the carrier that has been assigned to them.