Relates to deductibles for physical damage insurance.

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S6981-2011 Actions

• 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

S6981-2011 Meetings

Insurance: May 21, 2012

S6981-2011 Calendars

Floor Calendar: May 22, 2012 , Floor Calendar: May 23, 2012 , Floor Calendar: May 30, 2012 , Floor Calendar: May 31, 2012 , Floor Calendar: Jun 4, 2012 , Floor Calendar: Jun 5, 2012 , Floor Calendar: Jun 6, 2012 , Floor Calendar: Jun 11, 2012 , Floor Calendar: Jun 12, 2012 , Floor Calendar: Jun 13, 2012 , Floor Calendar: Jun 14, 2012 , Floor Calendar: Jun 18, 2012 , Floor Calendar: Jun 19, 2012 , Floor Calendar: Jun 20, 2012 , Floor Calendar: Jun 21, 2012

S6981-2011 Votes

S6981-2011 Memo

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.

S6981-2011 Text

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

                                    6981

                              I N  SENATE

                               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