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Why Auto Insurance Quotes Are Going Up in New York State

August 31st, 2023 | 8 min read

By Daniel J. Middleton

If you’re a driver in Central New York, you may have noticed that your auto insurance quotes are going up. You’re not alone.

You may be wondering what’s causing this spike in premiums and what you can do to lower your costs. You may feel frustrated, confused, and overwhelmed by the complex and confusing world of auto insurance.
But don’t worry. We’re here to help.

We’re Horan, a local insurance agency that has been serving Central New York drivers for over 15 years. We have access to several carriers and their latest rates and discounts. We can help you find the best policy for your needs and budget.

In this article, we’ll explain why auto insurance quotes are increasing in New York. We’ll show you what factors affect your rates and how you can save money without sacrificing coverage or quality.

The Market Cycle of Auto Insurance Rates in New York

According to a recent report, car insurance rates in New York have increased by 50 percent more than the national average. That’s a lot of money to pay for something you hope you never need.

Auto insurance quotes are going up in New York for several reasons. One of the main ones is the market cycle of auto insurance rates.

The market cycle refers to the fluctuations in supply and demand over time. In this case, supply and demand for auto insurance policies. When there is more supply than demand, carriers lower their rates. They do this to attract more customers and gain market share.

When there is more demand than supply, carriers raise their rates. This helps them cover their costs and make profits.

In the past, some carriers would enter New York State and buy up the market. They offered lower rates than most carriers in the area. Insurance agencies took notice and added them to their pool of insurers.

But the low rates were not sustainable. The carriers had to raise rates to survive. They faced higher claims costs, higher expenses, and lower profits.

This opened the door for new carriers to enter with cheap auto insurance rates. They also wanted to gain market share and attract customers.

But they also lost money and raised rates later. They faced similar challenges as the previous carriers.

It was a vicious cycle. But not anymore.

No new carrier has entered the scene with lower rates in recent years. The existing carriers have stabilized their prices from a baseline perspective.

But carriers still have different factors that affect their costs and their coverage. And these factors influence your auto insurance quotes in New York.

How Your Credit-Based Insurance Score Affects Your Auto Insurance Quotes

Another factor that affects your auto insurance quotes is your credit-based insurance score.

Your credit-based insurance score is a number that reflects how likely you are to file a claim. It also reveals how much it will cost the carrier. It is based on your credit history, but it is not the same as your credit score.

Your credit history shows how you manage your finances and pay your bills. It includes things like

  1. your payment history,
  2. your use of credit,
  3. your credit mix, and
  4. your credit inquiries.

As stated, your credit-based insurance score is not the same as your credit score, which is used by lenders and creditors to assess your creditworthiness. Your credit score is based on a different formula and scale than your credit-based insurance score.

Not all carriers use credit-based insurance scores to set auto insurance rates. Some carriers rely on other factors, such as your driving record, your vehicle type, your location, and your mileage. Some states have banned or limited the use of credit-based insurance scores for setting auto insurance rates. Included on that list are California, Hawaii, Massachusetts, Michigan, and Washington.

Why Do Carriers Care About Your Credit-Based Insurance Score?

Studies have shown that there is a correlation between credit-based insurance scores and insurance claims. People with lower scores tend to file more claims and have higher claim costs. This means carriers see them as riskier customers and charge them higher premiums.

In New York State, your credit-based insurance score does matter for your auto insurance rates, but not as much as in some other states.

WalletHub, a personal finance website, released an interesting study. Drivers with poor scores pay more for car insurance in New York. The average was 71 percent more than drivers with excellent scores. The study also found that the impact of scores varies by carrier in New York State.

Some carriers may use your score more or less than others when setting your rates. So, it is important to shop around and compare quotes from different carriers. See how each one factors in your score. You may find that some carriers offer better deals than others for your credit profile.

How Can You Improve Your Credit-Based Insurance Score and Lower Auto Insurance Rates?

The best way to improve your credit-based insurance score is to improve your credit history. You can do this by:

  1. paying your bills on time,
  2. keeping your balances low,
  3. avoiding applying for too many new accounts, and
  4. checking your credit reports regularly for errors.

You can get a free copy of your credit report once a year. They are available from each of the three major credit bureaus, Equifax, Experian, and TransUnion.

Improving your credit-based insurance score can take some time. But it can also save you money on other financial products. These include loans and credit cards. In the meantime, you can also shop around for auto insurance quotes from different carriers. Then, compare their rates and discounts.

You may find that some carriers are more lenient than others. And some may offer better deals than others when it comes to your credit-based insurance score.

Infographic-1_The Problem with Cheap Auto Insurance Quotes

How Vehicle Repair Costs Affect Your Auto Insurance Quotes

Another factor that affects your auto insurance quotes is vehicle repair costs.

Vehicle repair costs have seen a steady increase in the past five years, according to CCC Intelligent Solutions. This is due to several factors:

  • better technology,
  • higher labor costs,
  • more crashes, and
  • ongoing issues with supply chains for parts.

This means that repairing damaged vehicles has become more expensive for new and used vehicles alike. This also affects whether a vehicle is declared a total loss or not by insurance companies.

A total loss occurs when the cost of repairs plus the salvage value of a vehicle exceeds a certain percentage of its actual cash value. This percentage varies by state and by insurance company. In New York, it’s 75 percent.

Consider this. Your vehicle has an actual cash value of $10,000. Its salvage value is $2,000. The carrier will consider the vehicle a total loss if the cost of repairs is more than $5,500.

Five years ago (in 2018), the following scenario was more common. Say you were driving through Fulton, New York, and hit a busy patch. You approach the intersection at East Broadway and Second Street, in front of Fastrac. You have the green, but an eager Chevy Suburban driver barrels toward you on the intersecting street. He wants to beat a yellow light. You happen to get in their way and take a direct hit.

Your used 2013 Ford Escape has an estimated actual cash value of around $16,000 and an estimated salvage value of around $3,200 to $6,400. The carrier concludes that the damage it took will cost them $9,700. So they declare your Ford Escape a total loss.

Fast forward to today (in 2023), and a used 2017 Ford Escape carries a lower value. It has an estimated actual cash value of around $14,000. Its estimated salvage value is around $2,800 to $5,600. The damage it takes is $7,500 for the same accident. Now, the carrier has to pay for the repairs. This is because the vehicle’s value does not exceed the cost of repairs plus the salvage value.

As shown in this example, vehicle repair costs affect auto insurance quotes in two ways:

  1. They increase your premiums
  2. They determine whether your vehicle is totaled or not

The higher the repair costs are, the higher your premiums will be. The higher the repair costs compared to your vehicle’s value, the higher the likelihood the carrier will total your vehicle.

How can you lower your vehicle repair costs and save money on your auto insurance quotes? There are some things you can do, such as:

  • Maintain your vehicle. One of the best ways to lower vehicle repair costs is to maintain your vehicle. Proper maintenance on a regular schedule is critical. This means following the manufacturer’s recommendations. That includes oil changes, tire rotations, brake inspections, fluid checks, and other services. Doing this will help you prevent major problems and extend the life of your vehicle.
  • Choose a reliable vehicle. Another way to lower vehicle repair costs is to choose a reliable vehicle. It should have a good reputation for durability, safety, and performance. Some vehicles are more prone to breakdowns, malfunctions, or recalls than others. You can check the reliability ratings of different vehicles from various sources. These include Consumer Reports, J.D. Power, and Kelley Blue Book. They base these ratings on surveys, reviews, and tests from experts and owners. Choosing a reliable vehicle can help you avoid costly repairs. And it can save money on auto insurance quotes.

The Impact of PIP on Medical Costs and Auto Insurance Quotes in New York

If you get hurt in a car accident, personal injury protection (PIP) pays for your medical bills and lost income. It doesn’t matter who caused the accident. For this reason, PIP is also called no-fault insurance. Some states, like New York, make you buy PIP as part of your car insurance.

PIP leads to increased fees from doctors and hospitals for car accident injuries. This is because PIP covers many types of medical care:

  • emergency treatment
  • surgery
  • hospital stays
  • rehab, and
  • drug prescriptions

Some providers may need to use more or newer equipment and technology to treat car accident injuries. This can also increase their costs and fees.

These higher medical costs are passed on to the car insurance companies that pay for PIP. The insurance companies need to pay their costs and make money. So they charge more for providing PIP. This is how PIP can make car insurance quotes go up in New York.

Auto Insurance Quote Sheet Graphic

How to Save Money on Your Auto Insurance Quotes in New York

Now you know a few critical factors that affect your auto insurance quotes in New York. Armed with this info, you may be wondering how you can save money on them. Here are some tips that can help you lower your costs without sacrificing coverage or quality:

  • Compare rates. You can save money on car insurance by comparing rates from different carriers and agents. Some may have better deals or discounts than others for the same coverage. Some may help you lower your prices more than others. Comparing rates can help you find the best policy for you.
  • Bundle policies. You can also save money by buying more policies from the same carrier. For example, you may get a discount if you buy car and home insurance from the same carrier. Or if you have more than one car, you may get a discount if you insure them all with them. Buying more policies can make payment easy and help you save money.
  • Pay more upfront. Some carriers offer discounts for paying a policy in full upfront. Tweaking deductibles is also an option. A deductible is how much you pay before your insurance pays when you file a claim. A higher deductible means a lower premium, but more risk. A lower deductible means a higher premium, but less risk. You need to pick a deductible that fits your budget and risk. Paying more upfront can help you save money on your premium, but only if you can afford it.
  • Drop extra coverage. You can also save money by dropping extra coverage you don’t need or want. For example, if your car is old and cheap, you may not need collision or comprehensive coverage. They pay for your car’s damage in an accident or other event. You may also not need rental car or roadside coverage. They’re extras that cost more. Dropping extra coverage can help you save money, but only if you’re okay with less protection.
  • Ask for discounts. The last way to save money is to ask for discounts you may get. Carriers give discounts for many reasons, such as being a good driver, student, customer, or military member. They also offer discounts for having more policies or cars with them. Having safety features on your car, like brakes, airbags, or alarms, also scores discounts. Asking for discounts can help you save money, but only if you qualify and show proof. Read about 10 car insurance discounts for lower rates.

These are some of the tips that can help you save money on your auto insurance quotes in New York. But they’re not the only ones. There may be other ways to lower your costs that are specific to your situation and needs.

That’s why we recommend you click the Get a Quote button below for a free quote and consultation. We can help you find the best auto insurance policy for your budget. We partner with reliable insurance providers who offer competitive rates and robust coverage.

We can also help you understand how the factors we discussed affect your auto insurance rates. We’ll show you what you can do to improve them.

Want more tips on car policies? Learn how you can save on auto insurance quotes with safety features.

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Daniel J. Middleton

Daniel is an accomplished content creator. He has been working in publishing for almost two decades. Horan Companies hired Daniel as its content manager in November 2022. The agency entrusted its messaging to him. Since then, Daniel has written insurance articles, service pages, PDF guides, and more. All in an effort to educate CNY readers. He's helping them understand the world of insurance so they can make informed decisions.