What Is the New York Automobile Insurance Plan?
Last Updated on November 17, 2021
The New York Automobile Insurance Plan is an auto insurance program for high-risk drivers.
The program is run by the state of New York and an organization called AIPSO. You sign up for the program, and the program assigns a car insurance company to your case.
High-risk drivers pay higher rates with the New York Automobile Insurance Plan. However, for some high-risk drivers, it’s the only way to legally drive. If other insurance companies have turned you down, for example, then you might turn to the New York Automobile Insurance Plan for assistance.
What is the New York Automobile Insurance Plan? How does the NYAIP work? Keep reading to discover everything you need to know about the New York Automobile Insurance Plan.
- About the New York Automobile Insurance Plan
- Advantages of the New York Automobile Insurance Plan
- New York Automobile Insurance Plan Coverage Options
- How Much Does the New York Automobile Insurance Plan Cost?
- NYAIP Payment Plans
- Who Is Eligible for the NYAIP?
- How to Save Money on the New York Automobile Insurance Program
- How to Buy NYAIP Car Insurance
- Final Word on the NYAIP
About the New York Automobile Insurance Plan
The New York Automobile Insurance Plan (NYAIP) is an assigned risk car insurance program run by the state of New York.
When you enroll in the NYAIP, you get placed in a residual pool. Every car insurance company in New York must take a certain number of drivers from this pool (based on their size and a quota system). These car insurance companies must provide coverage to drivers in this pool. The car insurance company cannot turn you down – even if you’re a high-risk driver.
Each insurance company must take a certain number of drivers from the pool based on their market share. Because State Farm insures around 15% of all drivers in New York, for example, State Farm must take approximately 15% of the New York Automobile Insurance Plan’s residual pool. GEICO, Progressive, and other major insurance companies also take a significant share of drivers.
Advantages of the New York Automobile Insurance Plan
The New York Automobile Insurance Plan is designed for high-risk drivers who cannot obtain car insurance from the ordinary market.
If car insurance companies have rejected your insurance policy application, for example, or if you’ve been turned down by several insurers, then you can sign up for the New York Automobile Insurance Plan to continue driving legally.
Some of the advantages of the New York Automobile Insurance Plan include:
- High-risk drivers can obtain car insurance to continue driving legally
- The insurance company cannot reject your application
- Insures more than 90,000 high-risk drivers across New York every year
New York Automobile Insurance Plan Coverage Options
The New York Automobile Insurance Plan provides drivers with the minimum required car insurance in the state of New York.
However, drivers can also buy higher coverage limits. Insurers participating in the NYAIP must offer the option of purchasing higher amounts of coverage.
The state of New York requires the following minimum car insurance coverages under the New York Financial Responsibility law:
- $25,000 of bodily injury liability coverage and $50,000 of death coverage per person involved in an accident
- $50,000 of bodily injury liability coverage and $100,000 of death coverage for two or more people involved in an accident
- $10,000 of property damage liability coverage
Drivers have the option of purchasing a plan with 250/500/100 coverage, or $250,000 of bodily injury liability per person, $500,000 of bodily injury liability coverage per accident, and $100,000 in property damage liability coverage.
Drivers also have the option to purchase uninsured motorist coverage and basic personal injury protection (PIP), also known as no-fault insurance. Basic PIP covers $50,000 per accident, and insurers allow you to increase this coverage to $100,000.
Drivers under the NYAIP can also buy optional basic economic loss (OBEL) coverage of $25,000. It’s optional coverage for lost salary and other expenses not covered by car insurance.
How Much Does the New York Automobile Insurance Plan Cost?
The average driver under the New York Automobile Insurance Plan will pay around $2,454 per year.
In comparison, the average driver in New York pays around $2,204 per year for full coverage car insurance.
When signing up for the NYAIP, you can expect to pay double the car insurance premiums (or higher) compared to ordinary low-risk drivers in the state.
However, the cost of NYAIP car insurance varies based on several factors. Like voluntary car insurance, NYAIP car insurance varies in price based on:
- Age and gender
- The ZIP code where you park your car at night
- Your driving history
- Your make and model of vehicle
- The amount of coverage you’re buying
Based on all of these factors, you could pay anywhere from $1,500 to $5,000 per year through the NYAIP. Most drivers, however, pay between $1,900 and $2,800 per year when buying car insurance through the New York Automobile Insurance Plan.
NYAIP Payment Plans
Most insurers in New York offer two payment options to drivers under the NYAIP, including a six payment plan or a two payment plan.
Six Payment Plan: Under this plan, you pay 25% on the effective date of your policy, then 15% every month thereafter. If your NYAIP car insurance costs $1,500 per 6 month period, for example, then you pay $375 today, then $225 per month thereafter.
Two Payment Plan: Under this plan, you pay 25% on the effective date of your policy, then 75% one month later. If your NYAIP car insurance policy costs $1,500 for six months, for example, then you pay $375 today, then $1,125 next month.
Who Is Eligible for the NYAIP?
The New York Automobile Insurance Plan is not available to everyone. You must prove that you could not obtain car insurance through the ordinary market.
If you have requested a quote from multiple insurers and been rejected, for example, then you may be eligible for the NYAIP.
Typically, drivers who buy car insurance through the NYAIP have a history of multiple traffic infractions, several at-fault accidents, or multiple serious claims. Insurers consider these drivers riskier to insure than the average driver, so they charge higher rates.
To qualify for the NYAIP, you must meet the following requirements:
- You have been unable to find a car insurance policy with rates cheaper than the NYAIP within the last 60 days
- You have tried and failed to find car insurance through the voluntary market in New York
After signing up for the New York Automobile Insurance Plan, an insurer will be assigned to you. This insurer must offer you car insurance for a minimum of 3 years. After 3 years, you might choose to leave the NYAIP because you found cheaper rates in the voluntary market. If you have still not found cheaper rates in the voluntary market, however, then you can re-enter the NYAIP residual pool. The NYAIP will assign another insurer to you. In some cases, drivers continue to buy car insurance through their assigned insurer via the voluntary market.
How to Save Money on the New York Automobile Insurance Program
With the voluntary car insurance market, you can shop around to save money on car insurance. With the New York Automobile Insurance Program, you cannot shop around for lower rates; however, you can still save money through certain strategies, including:
Check the Voluntary Market: Compare NYAIP quotes with the voluntary market. Even if you’re eligible for the NYAIP, you may find cheaper rates in the voluntary market – especially if you are a medium-risk driver (or if your high-risk incidents occurred several years ago).
Reduce Coverage: You can drop coverage to save money with NYAIP insurance. You must buy a certain minimum amount of car insurance. Some drivers carry more than this amount, however, while other drivers carry less. If you want to save money on car insurance, consider dropping coverage.
Wait: If you don’t need to drive immediately, then consider waiting. The longer you wait, the further in the past your at-fault incidents will be. You might be able to get voluntary car insurance if you wait 6 to 12 months, for example. Or, your NYAIP prices may drop in the future.
As a high-risk driver, you’ll always pay more for car insurance in New York. Although you can save money by qualifying for the NYAIP, NYAIP car insurance will never be “cheap” compared to discount car insurance rates in the voluntary market.
How to Buy NYAIP Car Insurance
The New York Automobile Insurance Plan is managed by AIPSO, a management organization and service provider. The company has managed certain insurance and driving organizations across the country since 1973.
You can buy NYAIP car insurance through the official AIPSO website. Or, you can call the organization to connect with an agent:
Phone: (212) 943-5100
An agent will verify your claim. Then, you will be assigned to a residual risk pool. Every licensed car insurance company in New York must accept a certain number of drivers from this pool based on their market share. The largest car insurance companies in New York include GEICO (which also operates as Berkshire Hathaway Inc.), Allstate, State Farm, Progressive, Liberty Mutual, Travelers, USAA, NYCM Insurance, National General Holdings Corp, Nationwide, MetLife, and The Hartford. There’s a good chance you will be assigned to one of these insurers when you buy car insurance through the New York Automobile Insurance Plan.
Final Word on the NYAIP
The New York Automobile Insurance Plan is an assigned risk pool to help high-risk drivers obtain car insurance at a reasonable price.
If you were unable to find car insurance through the voluntary market, or if car insurance companies are charging higher prices than the NYAIP, then you should qualify for the NYAIP.
Contact an NYAIP agent today to obtain cheap high-risk car insurance in New York Through the New York Automobile Insurance Plan.