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Superintendent of Insurance Howard Mills today reminded consumers that helpful guidance on automobile insurance can be found at the National Association of Insurance Commissioners’ (NAIC) website,, in addition to the information available on the Insurance Department’s site,

"Smart motorists rely on seatbelts and airbags as the first line of protection in the event of a car accident," said Superintendent Mills. "Yet another important safeguard — especially for financial security — is understanding and purchasing appropriate automobile insurance coverage. Consumers should carefully assess their auto insurance needs, and shop around for the best price and most appropriate type of coverage."

While liability and no-fault insurance is mandated in New York, it is also a necessity for nearly all drivers to protect their assets in the event they cause a motor vehicle accident. Still, according to a 2006 Insurance Research Council study, 15 percent of U.S. drivers were uninsured in 2004, up from 13 percent in 1999.

It is in the consumer’s best interest to re-evaluate his or her auto coverage each year. However, a 2005 NAIC consumer study showed a significant number of drivers from all life stages (20–35 percent) had not reviewed or updated their auto insurance in the past 12 months.

Several factors may affect auto insurance premiums. These factors include, but are not limited to, vehicle make and model, credit history, driving record, age, gender, marital status, annual mileage, mileage to work, coverage limits, claim history and territory. Insurance companies differ on which criteria are weighed heaviest when determining auto premiums.

Parents also will see a significant change in premium when adding a teenager to the family auto policy. In some states, rates may double for a teenage boy and increase as much as 50 percent for a teenage girl.

There are several types of insurance coverage to consider when purchasing an auto policy:

  1. Liability insurance covers medical expenses and damages to another person’s property as a result of a motor vehicle accident caused by the insured’s negligence.
  2. "No fault" auto insurance may provide coverage for medical expenses, rehabilitation, funeral expenses, lost wages and in-home assistance to the driver and his or her passengers, regardless of who is held at fault in an accident.
  3. Many policies offer or include uninsured or underinsured motorist protection, which provides coverage for the insured and his or her passenger(s) if they are injured in a collision caused by an uninsured or underinsured motorist.
  4. Drivers with newer or leased cars may need to carry comprehensive insurance, which covers vehicular damages caused by fire, theft, wind, hail or a run-in with an animal.
  5. Collision insurance covers the cost of repairs or the actual cash value of the vehicle, if damaged or totaled in a crash or rollover. When financing a vehicle, banks often require comprehensive and collision coverage until the insured has paid off the loan.
  6. Consumers with large financial assets may want an umbrella liability policy, which provides additional coverage ($1 to $5 million) beyond the primary personal auto liability coverage.

Before buying or leasing a vehicle, remember that the make and model can drastically affect insurance rates. For example, luxury cars, high performance cars and convertibles — all of which may be attractive to thieves and more costly to repair — are more expensive to insure than basic models. All consumers should keep the following tips in mind when evaluating their auto insurance needs:

  1. Shop around and compare rates from different insurance companies. A good place to start is the consumer auto section at the Insurance Department’s website, There consumers can find the 2006 Consumer Guide to Automobile insurance as well as an interactive sample premium calculator.
  2. In some cases, an insurance company may offer a multi–policy discount if a consumer purchases both auto and homeowners coverage.
  3. Ask about discounts for cars equipped with safety features, such as anti–lock brakes, anti–theft devices and automatic seat belts.
  4. Consider raising the deductible on your collision and/or comprehensive insurance. With a higher deductible, the insured will be responsible for more of the cost to fix damages caused in an accident, but will pay a lower premium.
  5. Some companies offer discounts to drivers who have three or more years without an accident or moving violation.
  6. For older cars, consider dropping collision and/or comprehensive coverage altogether. In many cases, the insurance company will only pay the actual cash value frequently determined by the use of manuals, or computer data bases.
  7. Ask your insurance agent if the auto policy extends to rental cars. Often liability, no-fault and collision coverage on a personal policy extends to a rental car for personal use.
  8. Maintain a good credit history, because a credit score can have a direct impact on auto premiums.

Consumers’ insurance needs are constantly changing. Major events, such as turning 25, getting married or improving your credit rating, may make you eligible for lower rates. There is much more guidance and information at the NAIC’s website and on the Insurance Department’s site.

"It is important to review your auto policy each year," continued Superintendent Mills. "Decide whether your insurance needs have changed and update your coverage accordingly. If you have any questions, be sure to check with our department."

For more information about insurance consumers can visit the New York State Department of Insurance website at, or call toll-free at 1-800-342-3736. Consumers are also urged to visit Insure U, the NAIC’s consumer education Web site, at

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