People who like having their cars inspected will love New York.

Thanks to a legislature that took a suggestion from the insurance industry and turned it into a plan no one asked for, the state's drivers are going to have to have their cars inspected twice - once for safety and once for insurance.

"The legislature went just a little too far. They gave us more than we wanted," said Marshall Antonio of Allstate Insurance Companies.

"There's a little bit of overkill in it," said James Reagan of Geico, another insurance firm.

The new inspection system for insurance, which one consumer group estimates could cost New York drivers $20 million a year in higher premiums, originated in insurance companies' concern over "phantom cars."

A phantom car is one that was never worth what it was insured for or, in some cases, never existed at all, and whose owner rips off his insurance company by making a fraudulent damage claim.

To protect themselves from these frauds, insurance companies asked the legislature for a requirement for inspection of all cars on which new collision or comprehensive insurance is requested.

The legislature went one better. It passed, and Gov. Hugh Carey signed, a law also requiring inspection before an existing policy can be renewed. The inspections could not be made simultaneously with the annual safety inspections requried throughout New York.

This trailblazing law, unique to New York, is "an effort to contain the cost of physical damage insurance," according to the state Insurance Department. In other words, it was supposed to save consumers money.

The New York Consumer Assembly and several insurance comapnies variously estimate, however, that inspections will cost between $5 and $12 per car. Assembly president Al Smoke said that will amount to a bill of $20 million annually and insurance company spokesman agreed that the expense will be passed to policyholders.

There is also the question of inconvenience or, as vice president Reagan of Geico put it, "concern that this can be time consuming."

The law requries that all inspections take place within 10 miles or a 30-minute drive of where a car is garaged in cities of 100.00 or more, or within 25 of smaller communities and rural areas.

At the inspection the insurance company will take "at least one picture of your car which it will retain," the insurance department says.

For the renewal policies, the photos and the inspections are aimed at detecting any dents, to prevent these dents from being claimed as part of a later accident.

Allstate plans to subcontract its inspections to several different companies operating from auto dealerships and gas stations. Geico plans to have its own people make most inspections, but both recognize that the time and paperwork involved will be considerable.

"If failure ti inspect is your fault, physical damage coverage will either be suspended on the renewal date or coverage will not be effective until an inspection is completed," the department says in its explanation of the new program.