New York Commercial Auto Insurance Spotlight

If you’re operating a business in New York, chances are you need New York commercial auto insurance. Find out the commercial auto insurance requirements and the factors that will impact your premiums.

New York Commercial Auto Insurance Requirements

In New York state, you need to meet the following minimum insurance requirements to register your vehicle and obtain license plates:

No-Fault Personal Injury Protection (PIP) Insurance – This pays medical expenses, lost earnings, and other reasonable and necessary expenses related to an injury suffered by the driver or passenger. Basic no-fault coverage provides up to $50,000 per person.
Liability Insurance – This covers bodily injuries and property damage the insured (or the person who is driving the insured’s car with permission) causes to another person. New York drivers must carry a policy with a minimum limit of $25,000 for bodily injury not resulting in death and $50,000 for injury resulting in death sustained by one person; $50,000 for bodily injury not resulting in death for two or more people and $100,000 for bodily injury resulting in death for two or more people; and $10,000 for property damage.
Uninsured Motorist Insurance – This pays for costs related to injuries you or your passengers experience due to a hit-and-run accident or caused by an uninsured motorist.

These requirements apply to both commercial and personal vehicles. However, some types of vehicles (such as large trucks) may need more coverage.

Beyond the coverage required by state law, companies may decide to purchase additional coverage.

To protect your own vehicles, you’ll need collision and comprehensive coverage. Lenders may require this.
If your company’s vehicle is involved in a crash, the other party may try to secure a large reward. For this reason, your commercial liability limits should be much higher than the minimum limits required under state law.

If your company uses but does not own vehicles, you need hired and non-owned coverage. Individual owners also need to maintain personal coverage. For example, if an employee uses his personal vehicle to make deliveries, he needs to carry personal auto insurance and the company needs to carry hired and non-owned auto insurance.

Commercial Auto Insurance Rates

Commercial auto insurance rates depend on many factors, such as the type of vehicle, type of use, amount of coverage, size of the fleet, driving record of the drivers, and company’s claims history.

Commercial auto premiums have been rising. According to MarketScout, rates were up 7% in the fourth quarter of 2022. Crash severity, rising claims costs, and social inflation have all contributed to rising rates.

Commercial Vehicle Crash Trends

After years of declines, traffic fatality rates surged during the COVID-19 pandemic.

The NHTSA says 42,915 people died in motor vehicle crashes in 2021 – a 10.5% increase compared to 2020. The number of traffic fatalities involving at least one large truck increased by 13% during this time.

Commercial Auto Claim Costs

Claims costs have also increased due to inflation, supply chain issues, and labor shortages. Vehicles may also be more expensive to repair due to high-tech features, such as cameras and sensors.

According to Cars.com, production of new cars slowed during the pandemic, raising demand for used cars and leading people to keep their cars for longer. As the average age of vehicles rose, so did the need for repairs and maintenance. At the same time, inventory and labor shortages have caused delays at repair shops.

All of these factors have driven up claims costs. According to Property Casualty 360, auto repair costs increased by 4.9% in March 2022.

Social Inflation’s Impact on Commercial Auto

Social inflation refers to rising litigation costs, often tied to jumbo jury awards called nuclear verdicts. For example, Freight Waves says an Illinois trucking company filed for bankruptcy after being hit with a $10 million verdict. That’s not even the largest verdict on record – according to Lexology, the record was set in 2021 with a $1 billion verdict against a trucking company.

According to the Insurance Information Institute, social inflation contributed to a $30 billion increase in commercial auto liability claims between 2012 and 2021. Over the 10-year period, social inflation may have driven up claims by 18% to 20%.

Controlling Your New York Commercial Auto Insurance Rates

Commercial auto insurance rates are rising, but you still need robust coverage to protect your business. You can control your rates by implementing good risk control measures and safe driving practices.

The brokers at BNC Insurance can help you navigate the commercial auto insurance market. Learn more.