Why Is Car Insurance So Expensive in New York?

The average driver in the U.S. pays $1,424 per year for a full coverage policy with 100/300/100 limits. However, the cost of car insurance in New York is much higher — there, the average driver spends $3,433 annually for coverage. The state is rivaled only by Michigan for the most expensive insurance premiums in the country. Insurance premiums in New York have no sign of slowing down, with a 14.2% increase in costs over the past six years.

Factors such as high healthcare costs and additional insurance requirements contribute to why car insurance is so expensive in New York. Because of this, MoneyGeek recommends that drivers compare quotes and shop around to find affordable car insurance in New York.

In recent years, the average cost of car insurance has steadily increased across the U.S., and New York is no exception. Several factors contribute to this trend, including highway density, driver demographics and effects of extreme weather conditions.

MoneyGeek details these factors to help you understand why car insurance is so expensive in New York.

New York is a no-fault state, meaning you file a claim with your insurance provider after an accident, regardless of who is at fault. No-fault states tend to have additional insurance requirements like personal injury protection (PIP) insurance — also sometimes referred to as no-fault insurance — to ensure drivers are adequately covered after an accident. These additional coverages increase the overall cost of insurance for drivers in the state.

Healthcare is expensive across the United States, but costs are even higher in New York. According to a 2017 study conducted by the NYS Health Foundation, New York residents paid the eighth highest insurance rates in the country.

When healthcare costs are high, insurance companies pay out more in claims to cover the cost of treating injuries. Insurance carriers then set higher policy premiums to compensate for these higher-than-average healthcare expenses.

Auto insurance is required to register and operate a car in most states, including New York. New York’s minimum insurance requirements have the following limits:

• $10,000 for property damage per accident
• $25,000 for bodily injury and $50,000 for death per person in an accident
• $50,000 for bodily injury and $100,000 for death or all people in an accident

Drivers must also carry PIP and uninsured motorist insurance in the state.

These coverage requirements are above what is typically seen in most states, which tend only to require some form of liability-only coverage. Because the number of coverages included in your policy increases your premium, these requirements contribute to why car insurance is so expensive in New York.

New York is part of the Mid-Atlantic region, along with New Jersey, Pennsylvania, Maryland, Delaware and Washington DC. This region is at high risk of hurricanes and winter storms.

Winter storms, which typically happen between end-October and April, make even the safest roads dangerous. Hurricanes increase the likelihood of flooding, which may result in a total loss. Both severe accidents and total losses are costly for insurance companies to pay out; carriers mitigate these events' financial risks by charging more expensive premiums.

Neighborhood crime rates affect the average car insurance cost in New York. Areas where theft or vandalism is more frequent typically have higher rates because people are more likely to file claims there. Currently, New York City is considered safer than just 26% of all cities in the United States. Buffalo and Rochester, the second and third-largest cities in the state, are considered safer than only 6% and 7% of other cities, respectively.

The average cost of car insurance in New York is $3,433 per year or approximately $286 per month. Car insurance rates in New York have increased in recent years. From 2015–2021, premiums in the state went by $485 or 14.2% on average.