Prohibits insurers from imposing a surcharge for accidents where the property damage does not exceed two thousand dollars and where no physical injury resulted.
BILL NUMBER: S1700
TITLE OF BILL : An act to amend the insurance law, in relation to prohibiting surcharges for certain automobile accidents
PURPOSE : Increases the minimum amount of property damage in a motor vehicle accident that would require the accident to be reported to the Department of Motor Vehicles.
SUMMARY OF PROVISIONS : This legislation amends Section 2335 of the insurance law, subsection (c), raising from one thousand to two thousand dollars the amount of property damage which, if exceeded in a motor vehicle accident, would require the accident to be reported to the Commissioner of Motor Vehicles.
JUSTIFICATION : New York is in danger of becoming the highest-cost state in the nation for auto insurance. This legislation could help contain premium costs by preventing auto insurance surcharges for minor accidents.
The amount of property damage for which insurers may impose a premium surcharge is based on the amount set in V&TL Section 605 for accident reporting See 11NYCRR 169.1(a) . Changes in accident costs since 1991, when the current threshold was enacted, means that the most minor accident can result in an insurance surcharge.
Sometimes, the amount paid in surcharges over three years can equal or exceed the amount of the original insurance benefit. This is unfair to consumers and leads many to payout of pocket for claims which they could legitimately collect from insurers.
This bill affects only the reporting of accidents in which no person is injured. Any accident involving injury or death would remain reportable, regardless of the amount of damage.
However, for accidents that cause only property damage, the bill would increase the reporting threshold from $1,000 to $2,000. The threshold was last raised effective August 1, 1991, to $1,000 from $600. This bill, as amended, would still require minor accidents to be reported so statistics can be kept, but would adjust the insurance premium surcharge threshold to a fairer and more reasonable amount.
It is time to de-couple the insurance surcharge threshold from the DMV reporting requirement. Inflation alone, during more than 17 years since the amount was last adjusted, would justify raising the figure again. The situation is made more urgent by the escalating cost of auto repairs.
At today's process, even a minor accident can easily cause damage of more than $1,000. Unibody construction and new automotive paint technology mean that minor "fender-bender" damage often exceeds the $1,000 reporting threshold. Even a minor fender-bender in a minivan can rack up thousands of dollars in repair costs, according to crash tests conducted by the insurance industry.
PRIOR LEGISLATIVE HISTORY : 2004: A.9584-C (3rd Reading in Assembly) 2005-2006: S.981/A.3795 (Remained in Senate Transportation Committee/Passed Assembly) 2007-2008: S.1552/A.2468 (Remained in Senate Transportation Committee/Passed Assembly)
FISCAL IMPLICATIONS : None.
EFFECTIVE DATE : This act shall take effect immediately, with provisions.
STATE OF NEW YORK ________________________________________________________________________ 1700 2009-2010 Regular Sessions IN SENATE February 5, 2009 ___________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 prohibiting surcharges for certain automobile accidents THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 2335 of the insurance law, subsection (c) as added by chapter 747 of the laws of 1990 and as relettered by chapter 152 of the laws of 1998, is amended to read as follows: S 2335. Motor vehicle liability insurance rates; prohibition of surcharges for certain ACCIDENTS AND traffic infractions. No insurer authorized to transact or transacting business in this state, or controlling or controlled by or under common control by or with an insurer authorized to transact or transacting business in this state, which sells a policy providing motor vehicle liability insurance cover- age in this state shall increase the policy premium in connection with the insurance permitted or required by this chapter solely because the insured or any other person who customarily operates an automobile covered by the policy: (a) HAS HAD AN ACCIDENT THAT DOES NOT RESULT IN AGGREGATE DAMAGE TO PROPERTY IN EXCESS OF TWO TIMES THE DOLLAR AMOUNT OF THE ACCIDENT REPORTING THRESHOLD OF THE DEPARTMENT OF MOTOR VEHICLES AS PROVIDED FOR IN PARAGRAPH ONE OF SUBDIVISION (A) OF SECTION SIX HUNDRED FIVE OF THE VEHICLE AND TRAFFIC LAW. (B) has been found guilty of a traffic infraction under any of the provisions of the vehicle and traffic law provided, however, that this provision shall not apply to a conviction for a violation which occurred during the thirty-six month period ending on the last day of the fourth month preceding the month of the effective date of the policy if such conviction consisted of:EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04195-01-9 S. 1700 2
(1) operating a motor vehicle at a speed of more than fifteen miles per hour in excess of the legal limit; (2) operating a motor vehicle in excess of the speed limit, or in a reckless manner, where injury or death results therefrom; (3) operating a motor vehicle in excess of the speed limit, or reck- less driving, or any combination thereof, on three or more occasions; (4) operating a motor vehicle while intoxicated or impaired by the consumption of alcohol; (5) operating a motor vehicle while impaired by the use of a drug, within the meaning of section one thousand one hundred ninety-two of the vehicle and traffic law; (6) homicide or assault arising out of the use or operation of a motor vehicle, or criminal negligence in the use or operation of a motor vehi- cle resulting in the injury or death of another person, or use or opera- tion of a motor vehicle directly or indirectly in the commission of a felony; (7) operating a motor vehicle while seeking to avoid apprehension or arrest by a law enforcement officer; (8) filing or attempting to file a false or fraudulent automobile insurance claim, or knowingly aiding or abetting in the filing or attempted filing of any such claim; (9) leaving the scene of an incident without reporting; (10) filing a false document with the department of motor vehicles, or using a license or registration obtained by filing a false document with the department of motor vehicles; (11) operating a motor vehicle in a race or speed test; (12) knowingly permitting or authorizing an unlicensed driver to oper- ate a motor vehicle insured under the policy; (13) operating a motor vehicle insured under the policy without a valid license or registration in effect, except when the person convicted had possessed a valid license or registration which had expired and was subsequently renewed, or during a period of revocation or suspension thereof, or in violation of the limitations applicable to a license issued pursuant to article twenty-one or article twenty-one-a of the vehicle and traffic law; or (14) two or more moving violations of any other provision of the vehi- cle and traffic law;
[(b)](C) has had a temporary suspension of a driver's license pending a hearing, prosecution or investigation or an indefinite suspension of a driver's license which is issued because of the failure of the person suspended to perform an act, which suspension will be terminated by the performance of the act by the person suspended, or has had more than one such temporary or indefinite suspension arising out of the same incident issued against him or her, provided that the foregoing provisions of this section shall not apply if such suspension or suspensions has or have not been terminated on or before the effective date of the policy; or [(c)](D) with respect to a non-commercial private passenger automo- bile insurance policy, has had an accident while operating a commercial vehicle in the course of employment and in the discharge of the employ- ee's duties at the time of the accident, unless the accident is deter- mined to have been caused by the intentional action or gross negligence of the insured. S 2. This act shall take effect immediately provided that the amend- ments to section 2335 of the insurance law made by section one of this act shall expire on the same date as such section expires.