Before the 1950's, if a person wanted to purchase all the coverage that the modern day automobile insurance policy provides, he or she would have had to purchase at least four separate polices. Changes in the laws that regulate the sale of insurance now allow the insurance industry to sell policies that combine the separate coverages into one all encompassing policy.

The main advantage of combining the various coverages are lower expenses, and therefore a lower cost to consumers, and the convenience of being able to purchase the property, automotive liability and other coverages in a single policy.

The standard private passenger automobile insurance policy can have up to four different coverages. Only Part A is standard - the remaining three coverages are optional.

Part A provides liability coverage that protects the insured from lawsuits arising from either the negligent operation or ownership of a covered automobile. There are two coverages provided in Part A - bodily injury liability (BI) and property damage liability (PD).

1. BI provides coverage for the bodily injury claims of people you negligently injure in an accident.
2. PD provides coverage for any third party property damage claim that you are legally liable for.

Part B provides medical payments (MP) to the policy owner and any other passengers in the car when there is an accident. MP also provides coverage for pedestrians involved in the mishap.

Part C provides uninsured motorist and underinsured motorist protection for the policy owner.

Both coverages are designed to compensate the injured policy owner when the negligent driver has an insufficient amount of liability insurance under his/her own policy. Part C covers only bodily injury losses in NYS.

Part D covers damage to your car when it is involved in an accident. Other Than Collision (OTC) and Collision are the coverages.

Personal injury protection (PIP) for the policy owner and any other passengers in the car when there is an accident. PIP also provides coverage for pedestrians involved in the mishap. 
Mandatory coverage endorsement found in New York State automobile insurance policies.

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New York State has a compulsory insurance law that requires drivers to have at least automobile liability insurance (and mandatory personal injury protection (PIP) Parts A. These laws were enacted to ensure that the victims of automobile accidents receive compensation when their losses are caused by the actions of another individual who was negligent. 

Except for the bodily injury/property damage (BI/PD) and personal injury protection (PIP), many people with older vehicles decide not to purchase any of the physical damage coverages. It is often the case that the cost of repairing the damages to an older car is greater than its value. In these cases, your insurer will usually just "total" the car and give you a check for the car's market value less the deductible.

Many people forgo the Other Than Collision and Collision because of the relatively low values of their automobiles.

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Whenever you knowingly loan your car to a friend or an associate, he or she will be covered under your automobile insurance policy. In fact, even if you do not give explicit permission each time a person borrows your car, they are still covered under your automobile insurance policy as long as they had a reasonable belief that you would have given them permission to drive the car.

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Insurance coverages for short-term rental of private passenger vehicles is provided by your New York State automobile policy. Physical damage coverage for the rental vehicle is provided even if you do not presently carry Physical damage coverage on your own personal New York State automobile insurance policy. 

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Collision is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage.

Other Than Collision provides coverage for most other direct physical damage losses could incur. For example, damage to your car from a hailstorm will be covered under your other than collision coverage.

It is important to know the difference between the collision and OTC for a couple of reasons.

First, in order to make an informed purchasing decision about these optional coverages, you need to know the difference between them.

Second, the deductibles under the collision and other than collision coverages are often different in amount.

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The duties you need to perform after you have had an accident are prescribed both by state law and the terms of your insurance policy. Obviously, the first thing you should do is make sure everyone is all right and call an ambulance if one is needed.

Second, for most accidents in most states, the police should be notified.

Third, you should give the other driver(s) involved in the accident your name, address, telephone number, and the name of your insurance company and/or your insurance agent. You also need to get this same information from the other driver(s).

Forth, at the first opportunity, you should contact either your insurance agent or your insurance company to notify them that you have been involved in an accident.

Finally, there are a number of conditions in the insurance contract that you must satisfy in order to receive compensation from your insurer. For example, you need to cooperate with your insurer during any investigation undertaken during the claims settlement process. Failure to complete any of these actions can, and sometimes does result in non-payment by your insurance company for losses that otherwise would have been covered.

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Actuaries and statisticians who have studied the claiming behavior of people involved in accidents have long known that people who have either had an accident or received a ticket recently are more likely to have another in the next couple of years than people whose recent driving record has been incident free.

Insurance companies use this information not to punish people who have had an accident, but to charge them the premium that most accurately reflects their likelihood of having an accident.

People who are more likely to have accidents should reasonably be expected to pay higher premiums.

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With no-fault insurance , the victims of an automobile accident are compensated by their own insurance company, regardless of who caused the accident. This outcome is different from what occurs under a tort system of compensating victims of an accident.

In the tort system, the party who is at fault is required to compensate the victims of the accident. The idea behind no-fault is to keep small claims from being settled in our expensive court system.

To accomplish its purpose, no-fault insurance restricts the injured person's right to sue the negligent driver in those instances where the loss falls below a certain threshold.

Two types of thresholds are typically used: verbal thresholds and dollar thresholds. A dollar threshold prescribes a dollar limit that a claim must reach before the injured party regains his or her tort rights. 

A verbal threshold uses a written description to determine when the injured person regains his or her tort rights. For example, a person might regain his or her tort rights when the accident caused a serious handicap, such as a permanent loss of a bodily function.

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A number of factors can affect the cost of your automobile insurance - some of which you can control and some of which are beyond your control. The type of car you drive, the purpose the car serves, your driving record, and where you live can all affect how much your automobile insurance will cost you.

Even your marital status can affect your cost of insurance. Statistics show that married poeple tend to have fewer and less costly accidents then do single people.

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There are a number of factors you should consider when purchasing any product or service, and insurance is no different.

Here is a couple items to consider when purchasing automobile insurance.

First, purchase the amount of liability coverage which makes sense to you.

Second, you should decide which optional coverages you want. For example, do you want the optional physical damage coverages or is the market value of your car too low to warrant purchasing.

You should also decide whether you would like an insurance agent to assist you in your purchasing decision or if you would like to buy the insurance directly from a company that sells insurance over the phone or through the mail.

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There are a number of things you can do to lower the cost of your automobile insurance. The easiest thing to do is to shop around. It is not surprising to find quotes on automobile insurance that can vary by hundreds of dollars for the same coverage on the same car cont... 

When you shop, be careful to make sure each insurer is offering the same coverage. Many insurers use the ISO policy forms, but this is not always the case. 

Another way to lower the cost of automobile insurance is to look for any discounts that you may qualify for. For example, many insurers will offer you a discount if you insure multiple cars under the same policy, or if you have had a driver education class in the last three years. Be sure to ask your agent or company about their discount plans.

Another way to lower your cost of automobile insurance is to increase the deductible.

Simply raising your deductible from $250 to $500 can lower your premium sometimes as much as five or ten percent. However, you should be careful that you have the financial resources necessary to handle the larger deductible.

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