senate Bill S6981

2011-2012 Legislative Session

Relates to deductibles for physical damage insurance

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 21, 2012 committed to rules
May 23, 2012 advanced to third reading
May 22, 2012 2nd report cal.
May 21, 2012 1st report cal.843
Apr 19, 2012 referred to insurance

Votes

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May 21, 2012 - Insurance committee Vote

S6981
18
0
committee
18
Aye
0
Nay
0
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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S6981 - Bill Details

Current Committee:
Law Section:
Insurance Law
Laws Affected:
Amd ยง3411, Ins L

S6981 - Bill Texts

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Relates to deductibles for physical damage insurance.

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BILL NUMBER:S6981

TITLE OF BILL:
An act
to amend the insurance law, in relation to deductibles for physical
damage insurance

PURPOSE:
The purpose of this legislation is to permit automobile
insurance companies to reduce or zero out automobile physical damage
deductibles.

SUMMARY OF PROVISIONS:
Amends insurance law section 3411(k) to allow
auto insurance companies to offer a reduced or zero deductibles for
automobile physical damage.

EXISTING LAW:
Current insurance law requires auto insurers to offer
physical damage insurance with a standard deductible of $200 for each
occurrence. The insured also currently has the option to purchase a
policy with slightly lower deductibles upon inception of the policy,
at the annual anniversary date, or upon replacement/addition of a
vehicle as follows: $50 for fire/theft/comprehensive, $100 for
assigned risk policies, and $100 for collision. Current insurance
law also requires insurers to offer physical damage insurance with
higher deductibles ($250, $500, $1000 and any other amount the
superintendent may prescribe). Insurers are not currently permitted
to offer a reduced deductible, a zero deductible, or a deductible
that diminishes over time.

JUSTIFICATION:
This legislation would permit automobile insurance
companies to offer policies where there would be no out-of-pocket
payments for automobile damages. Currently the law mandates a minimum
deductible be paid by the customer. Automobile insurance offerings
have progressed since the enactment of this provision fueled by
innovative products and consumer demand.

In other states, consumers have access to different policies which
suit their needs. This legislation would provide flexible options to
automobile insurance companies. For example, one insurance company
may wish to provide reduced or zero deductibles based on the length
of time the consumer is with the insurance company, another may wish
to offer no deductible on property damage as part as an increased
premium. This legislation would accommodate these options. Of course,
such options are subject to the oversight of the Department
of Financial Services.

Policies without the requirement of deductibles or the payment
out-of-pocket expenses are widely accepted throughout the nation,

but are currently denied New Yorkers. This bill would allow for the
offering of these products to New York residents so they can decide
what level of coverage best suits their needs.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6981

                            I N  S E N A T E

                             April 19, 2012
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to deductibles for  phys-
  ical damage insurance

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subsection (k) of section 3411  of  the  insurance  law  is
amended to read as follows:
  (k) (1) Each insurer which offers physical damage insurance subject to
the  provisions of this section shall offer such insurance with a stand-
ard deductible of two hundred dollars for each occurrence.  The  insured
shall, however, at the inception of the policy or at the annual anniver-
sary  date,  or at the time of the replacement or addition of an automo-
bile, have the option of purchasing a policy with a  lesser  deductible,
but  in no event may the insurer sell a policy with a deductible of less
than fifty dollars for fire, theft or comprehensive insurance  coverages
(one hundred dollars for assigned risk policies issued pursuant to para-
graph two of subsection (a) of section five thousand three hundred three
of  this chapter) and one hundred dollars for collision insurance cover-
age except that window glass coverage may be sold without a  deductible.
Each  insurer  which  offers  physical  damage  insurance subject to the
provisions of this section shall also offer  physical  damage  coverages
with  co-insurance  or  deductible provisions or combinations thereof as
the superintendent may prescribe, including but not limited  to  deduct-
ibles  of  two hundred fifty dollars, five hundred dollars and one thou-
sand dollars.
  (2) NOTWITHSTANDING THE DOLLAR LIMITS FOR DEDUCTIBLES IN PARAGRAPH ONE
OF THIS SUBSECTION, AN INSURER WHICH OFFERS  PHYSICAL  DAMAGE  INSURANCE
SUBJECT  TO  THE  PROVISIONS  OF THIS SECTION MAY OFFER A REDUCED DOLLAR
DEDUCTIBLE, A ZERO DOLLAR DEDUCTIBLE OR  A  DEDUCTIBLE  THAT  DIMINISHES
OVER TIME AND MAY ULTIMATELY BE REDUCED TO ZERO DOLLARS.
  S 2. This act shall take effect immediately.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15192-01-2

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