NY State Senate Bill 2023-S2678

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to insurance
Jan 24, 2023	referred to insurance

2023-S2678 (ACTIVE) - Details

See Assembly Version of this Bill:: A1193
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §7902, Ins L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S9100, A10591
2025-2026: A1062

2023-S2678 (ACTIVE) - Summary

Relates to service contracts for accidental damages from handling and power surges.

2023-S2678 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S2678

SPONSOR: BRESLIN
 
TITLE OF BILL:

An act to amend the insurance law, in relation to service contracts for
accidental damages from handling

 
PURPOSE:

This bill amends the definition of "service contract" to confirm that
coverage for power surges and accidental damage from handling is not
incidental coverage and may be offered separately from other service
contract coverage.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill amends subsection (k) of Insurance Law § 7902 to
confirm that service contract coverage for power surges and accidental
damage from handling is primary coverage that may begin on the date a
covered device is purchased.

Section 2 provides that this bill is effective immediately.

 
EXISTING LAW:

Currently, the NYS Department of Financial Services interprets Insurance
Law 6 7902(k) to state that coverage for power surges and accidental
damage from handling is only permissible as incidental coverage. The
categorization as incidental coverage expressly prohibits such coverage
from exceeding the primary coverage in both term length and scope. This
effectively prevents a service contract from protecting a consumer
against power surges and accidental damage from handling starting on the
date the consumer purchases a covered device and throughout the term of
the manufacturer's warranty.

 
LEGISLATIVE HISTORY:

S9100 - 2021/22

 
STATEMENT IN SUPPORT:

Primary service contract coverage offers benefits comparable to a
manufacturer's limited warranty (i.e. coverage for defects in materials
and workmanship or wear and tear). Service contract coverage is supple-
mental to a manufacturer's warranty. To avoid unintentionally selling
duplicative coverage, primary service contract coverage may not begin
until the manufacturer's warranty expires.

Service contracts often also provide protection against power surges and
accidental damage from handling, but manufacturers' warranties usually
do not provide such coverage. The NYS Department of Financial Services
interprets the current law to state that power surge and accidental
damage from handling coverage is incidental to primary service contract
coverage and therefore, it must share the primary coverage's term length
(effective and expiration dates).

Since a manufacturer's warranty does not provide protection against
power surges and accidental damage from handling, and since a service
contract's protection against these perils may not begin until the
manufacturer's warranty expires, consumers are often left exposed and
without coverage against these perils during the term of the manufactur-
er's warranty.

This bill amends the Insurance Law to clarify that coverage for power
surges and accidental damage from handling is not incidental coverage,
and such coverage may be offered commencing on the date of purchase of a
covered device and may run concurrently with the manufacturer's warran-
ty. This change will provide substantial protection to consumers who
might otherwise end up paying the full replacement cost for a covered
device due to a power surge or accidental damage from handling during
the term of the manufacturer's warranty.

 
BUDGET IMPLICATIONS:

This bill will not have an impact on State finances.

 
EFFECTIVE DATE:
This bill would take effect immediately.

2023-S2678 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2678
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 24, 2023
                                ___________
 
 Introduced  by  Sen. BRESLIN -- 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 service contracts  for
   accidental damages from handling
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subsection (k) of section 7902 of  the  insurance  law,  as
 separately  amended  by chapter 247 of the laws of 2019 and section 1 of
 subpart Q of part XX of chapter 55 of the laws of 2020,  is  amended  to
 read as follows:
   (k)  "Service  contract" means a contract or agreement, for a separate
 or additional consideration, for a  specific  duration  to  perform  the
 repair,  replacement  or maintenance of property, or indemnification for
 repair, replacement or maintenance, due to  a  defect  in  materials  or
 workmanship  or  wear  and tear, POWER SURGES OR ACCIDENTAL DAMAGES FROM
 HANDLING, with or without additional provision  for  indemnity  payments
 for incidental damages, provided any such indemnity payment per incident
 shall  not  exceed the purchase price of the property serviced.  Service
 contracts may include towing, rental and emergency  road  service[,  and
 may  also provide for the repair, replacement or maintenance of property
 for damage resulting from power surges and accidental damage from handl-
 ing]. Service contracts may also include contracts to repair, replace or
 maintain residential appliances and systems. Such term shall also mean a
 contract or agreement made (1) by or for the manufacturer or seller of a
 motor vehicle tire for repair or replacement of the tire or wheel as the
 result of damage arising from a road hazard, (2) by or for the  supplier
 or  seller of a service for repair of chips or cracks in a motor vehicle
 windshield, but not including services that involve the  replacement  of
 the entire windshield, (3) by or for the supplier or seller of a service
 for  repair  or  removal of dents, dings or creases from a motor vehicle
 without affecting the existing paint finish using paintless dent  repair
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01944-01-3

 S. 2678                             2
 
 techniques,  but  not including services that involve the replacement of
 vehicle body panels, or sanding, bonding or painting; and (4) by or  for
 the supplier or seller of a service for repair or replacement of a motor
 vehicle  key  or  key  fob  in the event that the key or key fob becomes
 inoperable, lost or stolen. In conjunction with a motor  vehicle  leased
 for  personal  use,  such term shall also mean a contract to perform the
 repair, replacement or maintenance of property, or to provide indemnifi-
 cation for repair, replacement or maintenance, due to  excess  wear  and
 use or damage for interior stains, rips or scratches or missing interior
 parts  that  result  in  a  lease-end  charge not otherwise covered by a
 service agreement or warranty,  provided  any  such  payment  shall  not
 exceed the purchase price of the vehicle.
   § 2. This act shall take effect immediately.

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Senate Bill S2678

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Archive: Last Bill Status - In Senate Committee Insurance Committee

Actions

2023-S2678 (ACTIVE) - Details

2023-S2678 (ACTIVE) - Summary

2023-S2678 (ACTIVE) - Sponsor Memo

2023-S2678 (ACTIVE) - Bill Text download pdf

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Sponsored By

Neil D. Breslin

Archive: Last Bill Status - In Senate Committee Insurance Committee

Actions

2023-S2678 (ACTIVE) - Details

2023-S2678 (ACTIVE) - Summary

2023-S2678 (ACTIVE) - Sponsor Memo

2023-S2678 (ACTIVE) - Bill Text download pdf

Comments