New York state law does not require you to carry physical damage coverages of comprehensive and collision on a vehicle that has a lien holder on it, however the lien holder likely requires you to have obtain this type of coverage since the motor vehicle is their asset or the asset at least which they have a lien upon. Most insurance companies are filed with the state to require physical damage if there is a lien or lease on a vehicle.

Normally if you have a car with a lien on it you would want collision and comprehensive coverages on it since if the car was damaged or totaled out where you are either at fault or in a hit and run or if the car is stolen then the only way for you to make a claim would be if you had these coverages. If you could not repair or get paid the actual cash value for the vehicle due to an accident then the lien holder would have an issue with you and come to you for the monies since the asset with the lien on it is not viable any longer.

If you have a car which you are making payments on, a loan or lease, then normally the financial documents you signed require you to obtain and maintain certain auto insurance coverages on the vehicle while the lien holder still has the title to the vehicle. If you take off these coverages then an insurer can put on "forced" insurance which would be costly to you and offer you no protection but protection for the lien holder's asset.

If instead you have what is called a "mechanic's lien" on your vehicle, meaning that you owe someone money and the vehicle is the asset that they have an interest in until they are paid, then you likely do not have a contract to have comprehensive and collision on the vehicle. However as we explained earlier it is a good idea to have these physical damage coverages on a vehicle that people or financial institutions have an interest in.

As the NYS Department of Insurance notes, in order to register your car and obtain license plates in New York you must either purchase an automobile liability insurance policy from an insurer licensed by the New York State Insurance Department, or provide other acceptable proof of financial responsibility in at least the minimum amounts required by law. However, you may need to purchase higher amounts of the required coverages as well as other insurance coverages in order to meet your particular needs