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Eric R. Dinallo   Superintendent of Insurance  25 Beaver Street  New York, N.Y. 10004

ISSUED 3/12/2009 FOR IMMEDIATE RELEASE

ADVICE FOR THE CASH-STRAPPED CONSUMER…PROTECT YOURSELF WITH AUTO INSURANCE AND LOOK INTO POSSIBLE SAVINGS

By Eric Dinallo
Superintendent of the New York State Insurance Department

Cutting corners on auto insurance, or even dropping it, may seem like a tempting path for a cash-strapped consumer. However, the risks of doing so may be far more costly than an insurance premium. Besides, there are better ways to save on insurance.

There is evidence that there are more uninsured drivers because of the tough economy, but by doing so, people place themselves at risk, both legally and financially. Even underinsured drivers involved in serious accidents expose themselves to significant risk.

Drivers causing accidents involving uninsured damages, or damages exceeding the amount of the insurance purchased risk losing their assets, up to and including their homes. While consumers must have the minimum auto insurance required under the law, they should maintain coverage that is adequate in relation to protecting their assets.

Consumers should consult with their insurer to determine what best meets their needs. Many consumers select optional collision or comprehensive coverage. Consumers concerned about obtaining additional protection against the consequences of serious accidents may select higher no-fault, bodily injury and property damage liability limits.

Under state law, specific minimum insurance coverage – no-fault, liability and uninsured motorist coverage – must be maintained to drive a car or to register and obtain license plates for a new car. The law requires that insurance companies notify the state Department of Motor Vehicles of changes in the status of insurance coverage. This includes notifying the DMV when coverage has ended.

A lapse in insurance can result in either the suspension or revocation of a driver’s license and/or the motor vehicle registration. Court fines can be as much as $1,500 for driving without insurance and there can be a $750 civil penalty to get a license back after a revocation. Lapses in coverage can also result in more costly policy premiums when re-applying for insurance.

Whatever level of coverage they select, consumers can still consider practical, common-sense options that may be available to reduce insurance costs. These include:

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