3.1 New York Auto Insurance Requirements

New York's Compulsory Auto Coverage

New York is a compulsory-insurance and no-fault state. No vehicle may be registered without coverage written by a New York-admitted insurer, and the Department of Financial Services (DFS) enforces the rules through electronic insurance reporting (the IIES system). A lapse of even one day triggers automatic registration suspension and per-day civil penalties.

Minimum Liability Limits

The death-uplift (50/100) is a frequent exam trap: ordinary BI is 25/50, but when the accident causes death, the floor rises to 50/100. Producers should memorize both rows.

Proof and Penalties

• Owners must keep an FS-20 insurance ID card (paper or electronic) in the vehicle.
• Driving without coverage: fine up to $1,500, a $750 civil penalty to restore the license, and possible 1-year revocation.
• A lapse also produces a per-day civil penalty (e.g., $8/day rising to $12/day) before suspension.

Worked Example

Driver A rear-ends Driver B, who suffers a fatal injury, and damages two parked cars. Because the accident caused death, A's BI must respond up to $50,000 for the one fatality and $100,000 aggregate; PD of $10,000 splits across the parked cars. If A carried only 25/50/10, A is personally liable for the shortfall.

No-Fault (PIP) — "Basic Economic Loss"

Every New York auto policy includes Personal Injury Protection (PIP), statutorily called basic economic loss, totaling $50,000 per person. PIP pays the named insured, household members, passengers, and pedestrians regardless of fault, but it covers bodily injury only — never property damage.

What the $50,000 Pays

Claimants must give the insurer written notice within 30 days of the accident and submit medical bills within 45 days. Miss these deadlines and benefits can be denied — a tested administrative detail.

Optional No-Fault Add-Ons

• APIP (Additional PIP) — raises the $50,000 limit for medical and wage loss.
• OBEL (Optional Basic Economic Loss) — an extra $25,000 for medical or wage loss once basic PIP exhausts.

Memory aid: PIP is the "my own insurer pays me first" coverage. It does NOT pay for car repairs — that is collision/property damage. Mixing the two is the single most common no-fault error.

Serious-Injury Threshold and SUM

The Serious-Injury Threshold (Insurance Law 5102(d))

Because PIP pays everyone, New York limits lawsuits for pain and suffering. A claimant may sue in tort only if the injury crosses the serious-injury threshold:

• Death; dismemberment; significant disfigurement
• Fracture; loss of a fetus
• Permanent loss of use of a body organ, member, function, or system
• Permanent consequential limitation, or significant limitation, of a body function/system
• A medically determined injury preventing customary daily activities for at least 90 of the 180 days following the accident (the "90/180" rule)

If the injury does not meet the threshold, recovery is limited to no-fault benefits — no pain-and-suffering award.

Uninsured Motorist (UM) vs. SUM

Correct a common myth: SUM is not mandatory at a fixed limit. Under Insurance Law 3420(f)(2), the insurer must offer SUM equal to the policy's BI limits, and the first-named insured may decline or buy lower SUM with a written, signed election.

MVAIC

The Motor Vehicle Accident Indemnification Corporation (MVAIC) is the payer of last resort for victims of hit-and-run, uninsured, or stolen vehicles when no other coverage exists. It is funded by assessments on insurers and applies the compulsory limits. A claimant must give MVAIC notice of intention to file within 90 days and, for hit-and-run claims, report the accident to police within 24 hours.

Exam Logistics Anchor

The New York property and casualty licensing examination is delivered by PSI Services LLC for DFS: it contains 150 multiple-choice questions and requires a 70% overall passing score, with a time allowance of 2.5 hours (150 minutes). Producers must complete 90 hours of prelicensing education before sitting. Auto no-fault, the serious-injury threshold, and the SUM offer/waiver rule are recurring high-frequency casualty topics on this exam, so commit the exact thresholds above to memory rather than approximating them.

Common trap: Candidates conflate the $25/day "other expenses" benefit with a daily medical or wage benefit. It is a separate, capped allowance for incidental costs like transportation and household help — not a substitute for the 80%/$2,000-month wage benefit.