BILL NUMBER:  S638A

 TITLE OF BILL :

An act to amend the insurance law, in relation to reporting on motor
vehicle insurance fraud


 PURPOSE :

To report on the incidence of misrepresentation by insureds as to
where the principal places of motor vehicles are garaged and driven,
and that such misrepresentation will be considered a fraudulent
insurance act.

 SUMMARY OF PROVISIONS :

Section 405 of the insurance law is amended to require a report due to
the Governor and Legislature which includes the incidence of
misrepresentation by insureds of the principal place where motor
vehicles are driven and stored.

 JUSTIFICATION :

Within the Metro areas of New York State, automobile insurance is
appropriately higher in relation to the more rural, less populated
              

areas of New York State. The reasons for higher rates of automobile
insurance in Metro areas include higher incidents of accidents, theft,
and damage. The practice of misrepresenting the place where an
automobile is garaged or driven is a dishonest way of reducing the
costs paid for insurance. Residents of areas where insurance costs are
higher should not be permitted to pay lower rates for automobile
insurance based simply on documentation that states their motor
vehicle is garaged in an area where insurance costs are lower. This
act is causing an imbalance in the insurance pool of some regions in
less populated areas of New York State, causing rates for less
populated regions to be artificially inflated. This legislation seeks
to report on these incidents in order to combat these abuses.

 LEGISLATIVE HISTORY :

2008: S.188  Advanced to Third Reading/Passed Assembly
2006: S.60   Referred to Insurance/Passed Assembly
2004: S.2086 Referred to Insurance/Passed Assembly

 FISCAL IMPLICATIONS :

Undetermined.

 EFFECTIVE DATE :
This act shall take effect on the one hundred twentieth day after it
shall have become law.