A Guide to Spotting Insurance Coverage Gaps for New Yorkers

Assessing and fixing coverage gaps before they become pitfalls is essential to keeping yourself free of unnecessary expenses.

Key takeaways:

Being underinsured means your current coverage limits can’t meet claim expenses.
Underinsured New York policyholders can face huge out-of-pocket expenses.
Working with experienced insurance agents helps locate any coverage gaps.

Being insured in New York brings confidence, but it’s easy to get complacent with what you think is full coverage. No insurance policy is “set and forget”; each must be regularly reviewed and updated to reflect your current circumstances.

Failure to adjust your plans based on changes in your lifestyle, possessions, or even the world around you could leave you underinsured at a critical time. Many New Yorkers are unknowingly underinsured, with a large number being entirely without coverage (more on that below).

Both situations can leave people open to large out-of-pocket expenses. That’s why, in this article, we’ll uncover where these hidden costs lie, important underinsured New York statistics, and how to check if your coverage provides the protection you need.

New York Insurance Coverage Gaps: How Big Is the Problem?

Uninsured New York households are an unfortunately common issue in the Empire State.

Here’s a snapshot of some of the most important statistics:

Auto insurance: 10.8% uninsured (around 2.1 million people).
Home insurance: 11.1% uninsured (roughly 2.2 million people).
Health insurance: 4.8% uninsured (953,627 people).

While it’s impossible to provide underinsured figures due to the unique circumstances of policyholders, it’s safe to assume that many in New York state with some form of insurance are under standard policies.

The problem there is that standard policies often fall short of actual replacement or liability costs, creating coverage gaps.

That’s where the “underinsured New York” label is attached, and when unwanted (and sometimes unmanageable) expenses start appearing.

What It Really Costs to Be Underinsured

Assuming the presence of insurance coverage gaps is a proactive stance in a world where the price of everything seems to be always going up, and something unexpected (and potentially expensive) is bound to occur sooner or later.

The average cost to repair fire damage? $27,175.

Average liability lawsuit settlement for common injuries? $75,000.

A typical New York auto accident claim? Around $287,000.

And home renovation is also no stranger to surprise out-of-pocket expenses.

The potential for fire, water damage, and liability issues is present in even the smallest of these projects, and the web is full of horror stories about the high cost of renovations gone wrong.

Underinsured New York homeowners could save a small fortune by having homeowners’ renovation insurance.

These numbers are enough to make anyone question if they’re underinsured. Key indicators of insurance coverage gaps, which may cost thousands of dollars, include:

Your current deductibles exceed your savings.
The cost to rebuild your home is higher than your coverage.
Your coverage lacks riders for high-value items like art or jewelry.
No umbrella insurance for personal liability.
Only having the state minimum auto liability coverage.

That last one may not worry underinsured New York drivers since we’re a No-Fault auto insurance state. However, that term isn’t as safe as it sounds and is no substitute for having additional coverage.

Where in New York Are People Most at Risk of Being Underinsured?

The odds of being an underinsured New York policyholder can vary based on location.

For example, 9% of Bronx County is uninsured compared to only 5.3% in Saratoga County; not surprising, since the former is much lower on the median income scale.

However, being better off financially doesn’t mean insurance gaps are someone else’s problem. In fact, it’s quite the opposite. Those in more affluent areas usually have more to protect: more possessions, larger homes, and other assets.

Repair and replacement costs for these in the event of accidents, thefts, or natural disasters can be much more expensive, making it just as important for higher wage earners to protect their interests.

The number of underinsured New York properties is rising in tandem with our increasing number of flood zones.

You may be unaware of how rapidly climate change is altering how insurers see certain areas of New York, and you might be among the growing number of homeowners finding themselves underinsured as time goes on.

Then, there’s the impact of misinformation, or lack of intentional transparency, which can further contribute to an underinsured New York.

Policies aren’t always easy for people to understand, and it’s the provider/agent’s job to make things clear.

When there’s confusion, there’s false security that a plan offers comprehensive protection, but it doesn’t. This is another avenue for insurance coverage gaps to arise, and why annual reassessment of all your insurance policies is critical.

How to Evaluate If You Have Enough Coverage in New York

You can do this confidently by booking an in-depth policy review with an experienced insurance agent who’ll examine your current coverage step-by-step.

Inform them about any changes in your life (marriage, divorce, health), possessions (additions or subtractions), or property (like home renovations and vehicles) because these might impact your current plan.

Six good questions to ask insurance agents are:

“What’s my current level of liability?”
“Will inflation affect my policies?”
“Should I add or expand natural disaster-related insurance?”
“Are my deductibles and exclusions sufficient for my personal risk profile?”
“Should I add Additional Living Expenses (ALE) or increase my current provisions?”

A complete coverage checkup helps spot and correct insurance coverage gaps before they become heavy expenses. Make sure you review your plans with the right insurance team, and bonus points if their market is New York.

How NICRIS Helps You Find the Gaps

We make New York coverage assessment quick and easy by offering an hour-long policy review and risk assessment that’s completely free to help you discover if you’re in the underinsured New York group.

We’ll help you identify and address any vulnerabilities in your current plans, then provide expert advice on how to fix any gaps with personalized recommendations based on your lifestyle, location, and budget.