S T A T E O F N E W Y O R K
________________________________________________________________________
5407
2017-2018 Regular Sessions
I N A S S E M B L Y
February 8, 2017
___________
Introduced by M. of A. DiPIETRO -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the insurance law, in relation to required inspections
for automobile physical damage insurance covering private passenger
automobiles
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 3411 of the insurance law, subsections (e) and (f)
as added by chapter 805 of the laws of 1984 and subsection (i) as
amended by chapter 161 of the laws of 1996, is amended to read as
follows:
§ 3411. Automobile physical damage insurance covering private passen-
ger automobiles; standard provisions; [required inspections;] duties of
insurers and insureds. (a) The provisions of this section shall be
applicable to all automobile physical damage insurance policies covering
private passenger automobiles registered in this state, notwithstanding
any other provisions of this chapter.
(b) In this article, "renewal" means the issuance and delivery by an
insurer, at the end of the policy period, of a policy superseding a
policy previously issued and delivered by the same insurer, or the issu-
ance and delivery of a certificate or notice extending the term of a
policy beyond its policy period or term. Any policy with a policy period
or term of less than one year shall, for the purpose of determining each
renewal date in this section, be considered as if written for a policy
period or term of one year commencing with the annual anniversary date,
and any policy written for a period or term of more than one year or any
policy with no fixed expiration date shall, for the purpose of this
section, be considered as if written for successive policy periods or
terms of one year commencing with the annual anniversary date.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05923-01-7
A. 5407 2
(c) [No policy providing automobile physical damage insurance for
private passenger automobiles registered in this state shall be issued,
delivered, or renewed unless it complies with this section.
(d) A newly issued policy shall not provide coverage for automobile
physical damage perils prior to an inspection of the automobile by the
insurer.
(e) For a renewal of a policy referred to in subsection (d) of this
section, an insurer may require, as a condition of such renewal, that
the automobile be made available for inspection.
(f)] If an insurer requests an inspection [pursuant to subsection (e)
of this section], the insured shall make the automobile available for
inspection by the insurer, upon reasonable notice. If the insured fails
to make the automobile available for inspection, the insurer may refuse
to continue such physical damage coverage.
[(g) If an automobile subject to the provisions of this section is
acquired by the insured as a replacement for or an addition to an auto-
mobile insured for physical damage coverage, and the insured requests
physical damage coverage for the replacement or additional automobile,
such coverage for physical damage shall not be effective before such
inspection is made. If, at the time of the request for such coverage,
the automobile is unavailable for inspection because of conditions of
purchase or other circumstances and is thereafter made available for
inspection, the insurer shall promptly inspect the automobile, and phys-
ical damage coverage shall not become effective before the inspection
has been made.
(h)] (D) Where an inspection is made pursuant to this section, it
shall be conducted by the insurer or its authorized representative and
shall be recorded on a form prescribed by the superintendent. Such form
shall be retained by the insurer with its policy records for such
insured, and a copy of such form shall be made available to the insured
upon request.
[(i)] (E) Payment of a physical damage claim shall not be conditioned
upon the repair of the automobile, provided, however, the insured shall
replace any inflatable restraint system (airbag), as defined in subpara-
graph (b) of S 4.1.5.1 of standard 208 of part 571 of title 49 of the
code of federal regulations, that inflated and deployed, or that was
stolen, which is included in a physical damage or theft claim. The
insurer may request that the automobile be made available for inspection
whether or not the automobile is repaired. The results of such
inspection may form a basis for determining the value of the automobile
in the event of a subsequent loss. If the automobile is repaired the
insurer shall request the repair invoice and shall require the insured
and the automobile repairer to certify, under penalties of perjury,
whether the applicable deductible has been paid to the automobile
repairer, whether any repairs have been made and whether the repairs did
not include all items allowed by the insurer.
[(j)] (F) The superintendent may approve policy forms for physical
damage coverage, for new and renewable business, which exclude coverage
for specified items of personal property located in or upon the automo-
bile.
[(k)] (G) Each insurer which offers physical damage insurance subject
to the provisions of this section shall offer such insurance with a
standard deductible of two hundred dollars for each occurrence. The
insured shall, however, at the inception of the policy or at the annual
anniversary date, or at the time of the replacement or addition of an
automobile, have the option of purchasing a policy with a lesser deduct-
A. 5407 3
ible, 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 pursu-
ant to paragraph two of subsection (a) of section five thousand three
hundred three of this chapter) and one hundred dollars for collision
insurance coverage 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 combina-
tions thereof as the superintendent may prescribe, including but not
limited to deductibles of two hundred fifty dollars, five hundred
dollars and one thousand dollars.
[(l)] (H) Every insurer subject to the provisions of this section
shall report to the commissioner of motor vehicles any evidence of over-
charges, improper repairs or adjustments or other wrongdoing by motor
vehicle repair shops, in order that the department of motor vehicles may
properly discharge its responsibilities under the vehicle and traffic
law to protect consumers from dishonest, deceptive and fraudulent prac-
tices in the repair of automobiles, to protect the public from improper
repairs and to eliminate unqualified motor vehicle repair shops.
[(m)] (I) (1) The superintendent, in regulations implementing the
provisions of this section, shall also require that insurers take appro-
priate action to ensure that there is wide public dissemination of the
provisions of this section relating to the rights and obligations of
insureds and insurers.
(2) [The inspections provided for in this section may be dispensed
with or deferred under circumstances specified in regulations of the
superintendent. Such circumstances may include but are not limited to,
the insuring of a new automobile, the insuring of an automobile whose
inspection would constitute a serious hardship to the insurer, the
insured or an applicant for insurance, and the insuring of an automobile
for a limited specified period of time.
(3)] Inspections made pursuant to this section shall be made at
locations and times reasonably convenient to the insured. The results of
any inspection may be considered in determining the value of the automo-
bile.
[(n)] (J) If the superintendent, after notice and hearing, finds that
any insurer or its authorized representative has violated any provision
of this section, he shall order the payment of a penalty, not to exceed
five hundred dollars for each such offense. Each issuance, procurement
or negotiation of a policy of insurance in violation of this section
shall be a separate offense.
§ 2. This act shall take effect immediately.