Senate Bill S8886

                                
 
BILL NUMBER: S8886

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to amend the insurance law, in relation to property/casualty
insurance contracts

 
PURPOSE:

The purpose of this bill is to prohibit the cancelation or conditional
renewal of an auto insurance policy based on a claim filed by a policy-
holder who was a pedestrian struck by a vehicle.

 
SUMMARY OF PROVISIONS:  This bill would amend subparagraph (B) of
paragraph (3) of subsection (m) of section 3425 of the insurance law to
provide that if a named insured was involved in an accident while such
named insured was a pedestrian, such accident shall not constitute one
of the three accidents within a 36-month period which allow an auto
insurer to cancel or conditionally renew an auto policy.

              

 
JUSTIFICATION:

Section 3425 of the insurance law establishes specific incidents and
conditions under which an auto insurer may cancel or conditionally-renew
an auto insurance policy. One of those conditions is that the named
insured has had three accidents within a 36-month period. The same
section defines certain claims which shall not constitute an accident,
and therefore shall not contribute to the
three-accidents-within-a-36-monthperiod allowance for cancellation or
conditioned renewal. Such accidents include if the named insured's vehi-
cle was struck in the rear, or the named insured's vehicle was struck
while legally parked. In such cases, the named insured clearly did not
contribute to the accident, and therefore such accident does not signify
that the named insured represents an increased risk to justify a policy
cancellation or increased premium.

The no-fault law provides first party benefits to auto policyholders.
If a pedestrian is struck by a vehicle in the event of a hit-and-run,
the policyholder's auto insurance carrier pays the medical insurance
claim. However, as in the case of damage to a legally-parked car, the
payment of the claim does not signify that the named insured represents
an increased risk of future claims. Therefore, if a named insured is
struck by a hit-and-run vehicle, an insurance company should not be able
to count that claim as one of the "accidents" in a 36-month period.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.