BILL NUMBER: S1700
TITLE OF BILL :
An act to amend the insurance law, in relation to prohibiting
surcharges for certain automobile accidents
Increases the minimum amount of property damage in a motor vehicle
accident that would require the accident to be reported to the
Department of Motor Vehicles.
SUMMARY OF PROVISIONS :
This legislation amends Section 2335 of the insurance law, subsection
(c), raising from one thousand to two thousand dollars the amount of
property damage which, if exceeded in a motor vehicle accident, would
require the accident to be reported to the Commissioner of Motor
New York is in danger of becoming the highest-cost state in the nation
for auto insurance. This legislation could help contain premium costs
by preventing auto insurance surcharges for minor accidents.
The amount of property damage for which insurers may impose a premium
surcharge is based on the amount set in V&TL Section 605 for accident
reporting See 11NYCRR 169.1(a) . Changes in accident costs since
1991, when the current threshold was enacted, means that the most
minor accident can result in an insurance surcharge.
Sometimes, the amount paid in surcharges over three years can equal or
exceed the amount of the original insurance benefit. This is unfair to
consumers and leads many to payout of pocket for claims which they
could legitimately collect from insurers.
This bill affects only the reporting of accidents in which no person
is injured. Any accident involving injury or death would remain
reportable, regardless of the amount of damage.
However, for accidents that cause only property damage, the bill would
increase the reporting threshold from $1,000 to $2,000. The threshold
was last raised effective August 1, 1991, to $1,000 from $600. This
bill, as amended, would still require minor accidents to be reported
so statistics can be kept, but would adjust the insurance premium
surcharge threshold to a fairer and more reasonable amount.
It is time to de-couple the insurance surcharge threshold from the DMV
reporting requirement. Inflation alone, during more than 17 years
since the amount was last adjusted, would justify raising the figure
again. The situation is made more urgent by the escalating cost of
At today's process, even a minor accident can easily cause damage of
more than $1,000. Unibody construction and new automotive paint
technology mean that minor "fender-bender" damage often exceeds the
$1,000 reporting threshold. Even a minor fender-bender in a minivan
can rack up thousands of dollars in repair costs, according to crash
tests conducted by the insurance industry.
PRIOR LEGISLATIVE HISTORY :
2004: A.9584-C (3rd Reading in Assembly)
2005-2006: S.981/A.3795 (Remained in Senate Transportation
2007-2008: S.1552/A.2468 (Remained in Senate Transportation
FISCAL IMPLICATIONS :
EFFECTIVE DATE :
This act shall take effect immediately, with provisions.
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