If you drive a vehicle registered in the state on public roads and highways, you must carry New York State (NYS) liability insurance. Doing so ensures financial responsibility on your part. It proves you can cover the cost of damages (either property or injury) if you are ever involved in an auto accident.

Even if you are driving an out-of-state vehicle registered outside of New York, it must satisfy the NYS financial responsibility law.

Ways to Establish Financial Responsibility

The only way to establish financial responsibility is to obtain NYS liability insurance coverage. Some states offer their residents a few choices, but here your sole option is to sign up for a liability insurance policy. This is purchasable through an insurance provider.

New York Liability Insurance Requirements for Private Passenger Vehicles

You must purchase NYS insurance coverage from a company authorized to do business in the state (out-of-state policies will not suffice). Such companies must also be licensed by the NYS Insurance Department.

The state minimums for liability insurance coverage fulfilling New York’s financial responsibility law are as follows:

• $25,000/50,000 for injury

• $50,000/100,000 for death

• $10,000 for property damage caused by any one accident

New York is a no-fault state. As long as your registration is valid you must maintain liability coverage, even if your vehicle is not in use.

You will want to consider researching many types of coverage before you settle on one insurance company’s policy. For example, if the value of your assets is high and want to protect them, you might prefer to purchase a policy that covers more than the state minimums. And, once you determine what and how much coverage suits you, shop around for a competitive rate.

Once you purchase a policy in your name (as the registrant), keep it in your name at all times; the policy and your registration must be in the same name and address. If you make a name change on your insurance policy that differs from the name with which registered the vehicle, it will cause a lapse in coverage.

To read about the penalties that result, scroll down to the section titled "Penalties for Failure to Maintain Financial Responsibility."

Electronic Reporting

Be sure your insurance company files an electronic notice of insurance coverage with the DMV; this is NOT something an agent or broker can do. This is very important in proving financial responsibility as showing the Department of Motor Vehicles (DMV) your card alone will not suffice.

Proof of Insurance and Financial Responsibility

In addition to having your insurance company file an electronic notice of insurance coverage with the DMV, you must also show the DMV a NYS Insurance Identification Card when you register your vehicle. The state requires both electronic filing and paper proof.

Be sure to obtain two original NYS Insurance Identification Cards―from either your insurance company, broker or agent― that display the same name you have printed on your registration application. These cards must also have a barcode.

You must take one card to the DMV within 45 days of the effective date of your insurance policy; the DMV will keep it when you apply for registration. Keep the other card in your vehicle at all times just in case you get pulled over by a peace officer or if you are involved in an accident.

Penalties for Failure to Maintain Financial Responsibility

Once you show proof of insurance at the time of registration, do not allow your coverage to lapse. If it does lapse the following will occur:

• Your driver’s license will be suspended.

• Your registration will be suspended.

• If you are involved in a traffic accident while not insured with liability coverage, the state will revoke your license and registration for at least one year. The same will happen to you if someone else crashes your vehicle while it is not insured.

• You will be fined as much as $1,500 for driving without insurance or allowing someone else to operate your uninsured vehicle. When you try to get your license back you’ll have to pay the DMV an additional $750 civil penalty.

If you allow your insurance to lapse, you must submit your plates to the DMV. For more details, read below.

No Insurance, No Plates

The state has a simple rule regarding adequate insurance coverage: If you do not have it, immediately turn in your license plates. If you hold your plates once your coverage lapses, the state will suspend your registration for the same number of days you lacked coverage. If that time exceeds 90 days, the state will also suspend your license for the same number of days as the registration.

After the suspension, you’ll have to pay a $25 termination fee to reinstate your license.

Save yourself the hassle and simply submit your plates in person to the DMV or mail them to:

• NYSDMV, Port Jefferson Office

• 3 Roads Plaza

• 1055 Route 112

• Port Jefferson Station, NY 11776-3054

If you fail to surrender your plates at all, the state will suspend your license and registration indefinitely.

You can avoid getting your registration suspended when you pay a civil penalty instead of turning your plates in to the DMV as long as the lapse is 90 days or less. If you have taken advantage of this option already in the past 36 months, you cannot do so again. Here’s how the penalties per day pan out:

• One to 30 days: $8 per day

• 31 to 60 days: $10 per day

• 61 to 90 days: $12 per day

For more info on auto liability insurance and penalties for no proof of insurance or failure to maintain insurance, call the state at (518) 474-0700.