New York Lawmakers Consider Bill to Reform Auto Insurance Inspections
New York lawmakers are considering a bill that would amend current insurance law, addressing a situation where motorists have lost collision coverage they paid for. The proposed bill, S6028, seeks to remove the requirement for insurance companies to inspect passenger vehicles before issuing policies covering physical damage.
The bill is currently under review by the Senate’s Insurance Committee. Under current law, drivers involved in accidents have sometimes discovered they lacked coverage because the required inspection wasn’t performed. This can happen even though the policyholder purchased and paid for the coverage.
Senator Neil D. Breslin (D, IP, WF, 44th District), the bill’s primary sponsor, explained the issue. “In this situation, the insured has purchased coverage and paid the premium, but will not be covered if his or her auto sustains physical property damage simply because the auto was inadvertently not inspected,” Breslin, who also chairs the Insurance Committee, wrote in a memo accompanying the bill.
The inspection requirement was originally established in the 1970s to combat insurance fraud, targeting policies for non-existent vehicles. However, according to Breslin: “Technology advances and vehicle tracking systems such as VIN etchings has made it much more difficult for persons seeking to engage in insurance fraud.”
Breslin’s office shared with Repairer Driven News that insurance companies, brokers, and agents have reported customers losing coverage because a vehicle inspection hadn’t been completed. The bill, which is called the Auto Insurance Consumer Relief Act, enjoys bipartisan support, with 11 Democratic and six Republican co-sponsors.
The proposed changes involve amending Section 4311 of the insurance law. The amendment would allow insurers to waive vehicle inspections under various circumstances. These could include insuring a new vehicle, insuring a vehicle where an inspection would be a hardship, or insuring a vehicle for a short period. If the bill passes the Assembly and is signed into law by Governor Kathy Hochul, the changes would take effect on January 1, 2023.
A6877, a similar bill sponsored by Assemblyman Ken Zebrowski, D-Clarkstown, already passed the Assembly on March 30 with a significant 118-30 vote.
Edward Kizenberger, the executive director of the Long Island Auto Body Repairmen’s Association and the New York State Auto Collision Technician Association (LIABRA/NYSACT), stated that the bill would have a limited impact on the collision repair industry. “Other than bringing potential new customers into a facility that may do Carco or photo inspections for verifying existing damage for insurance companies, the proposed change really does not affect us,” Kizenberger said. Carco specializes in pre-insurance vehicle inspection services.
The Business Council of New York State backs the bills, arguing that the current law places an unnecessary burden on both insurers and policyholders. “Under existing law, drivers who want to obtain comprehensive or collision coverage must visit an inspection site in person within 14 days of their policy’s effective date,” the council stated. “Should an insured party fail to get to an inspection site for any reason, coverage must be canceled. With time and resources short for many families, this requirement can become more than a simple inconvenience, it can become a major disruption.” The council also noted that modern fraud detection technology makes inspections unnecessary and that waiving them “only works to save the public time, money and affordable coverage.” Over twenty additional organizations have also voiced their support for the bill, these include the New York Insurance Association, the National Federation of Independent Business-New York, and the Associated General Contractors of New York State.
