Why is Car Insurance so Expensive in NYC?

New York City has some of the highest car insurance rates in the country, with average annual premiums of $4,392 according to 2021 data. Drivers in NYC pay 165% more compared to the national average of $1,658 per year.

There are several factors that contribute to the exorbitant cost of auto insurance in New York City:

High Rate of Accidents and Claims

With over 1 million vehicles on the road daily, accidents are common in NYC. The city sees around 200,000 crashes per year, which leads to a high volume of injury and property damage claims. More frequent claims drive up the cost insurers pay out, so they charge higher premiums as a result.

Dense traffic, aggressive driving habits, pedestrians, and cyclists all contribute to the high accident rate. Certain areas like Brooklyn and the Bronx see the highest collision rates.

Costly Repairs and Medical Care

The price to repair today’s high-tech cars keeps rising. Parts, electronics, sensors and even paint jobs are more expensive. The average claim severity (repair cost) grew nearly 8% from 2014 to 2018 nationwide. Insurers pass these inflationary repair costs to consumers.

In addition, NYC has some of the highest medical costs in the nation. Auto injury claims often include expensive ambulance fees, ER visits and lengthy treatments. This also pushes up the claim amounts insurers must pay out after accidents.

High Rate of Uninsured Motorists

Around 20% of drivers in Brooklyn lack insurance, and around 15% in Queens and the Bronx go uninsured. When underinsured motorists cause accidents, it often falls on paying customers’ policies to cover the damages in no-fault states like New York. Insurers then raise premiums on paying customers to make up for these losses.

Density and Congestion

With 27,000 people per square mile, NYC is America’s densest city. Congestion and tight spaces leave little margin for error, leading to more accidents. Parking also leads to dents, scratches and hit-and-runs that insurers must cover. Higher risk exposure translates to higher premiums.

Cost of Living

The high cost of living in NYC also plays a role. Higher home values mean claims for property damage liability will be more severe. And garaging a car in NYC costs 3-4 times more than other cities, which insurers may factor in.

State Regulations

New York has strict insurance regulations that impact costs. For example, NY requires both personal injury protection (PIP) and bodily injury (BI) liability coverage, while most states only require BI. The state also mandates $50,000 BI per person, which is higher than many states. More mandated coverage means higher rates.


Staged accidents and inflated claims are common forms of insurance fraud in New York. Criminals try to exploit no-fault laws to obtain bogus payouts, driving up insurers’ losses. Customers pay the price through higher premiums.

How to Save on Car Insurance in NYC

While base rates are high, you can take steps to lower your premium:

  • Comparison shop multiple insurers to find the best rates.

  • Ask about all available discounts from each insurer.

  • Consider dropping collision/comprehensive coverage if your car is old.

  • Raise your deductibles to at least $500 or $1,000.

  • Ask insurers about usage-based or pay-per-mile programs.

  • Maintain a clean driving record with no accidents or violations.

  • Ask about discounts for taking defensive driver courses.

  • Inquire about discounts for garaging your vehicle outside of NYC.

So while costs are inflated in New York City, you still have options to offset the expensive premiums and secure some savings. Make sure to shop around regularly, as insurers’ rates and discounts can change over time.

Why NY Car Insurance is so Expensive


What is average car insurance cost in NYC?

Average Car Insurance Cost New York New York drivers pay an average of $2,088 per year or $274 per month for full coverage car insurance. That’s 3% higher than the national average of $2,008 per year. These estimates are based on the profile of a 35-year-old driver with a clean driving record and a good credit score.

What is the cheapest car insurance in NYC?

Progressive is the cheapest car insurance company in New York for full-coverage insurance. A full-coverage policy from Progressive costs $94 per month, which is 45% cheaper than average. The average cost of full-coverage auto insurance in New York is $169 per month, or $2,030 per year.

Why is car insurance going up so much in 2023?

Inflation. Nobody in America will be surprised to learn that inflation has spread to all areas of the economy, including car insurance. As vehicles become more expensive to repair and replace, car insurance rates climb as well. The price of both new and used cars has soared over the past few years.

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