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New Law Lets New York Auto Insurers Waive Photo Mandate Starting Next May

November 21, 2023

New York finally has a law on the books that allows insurance companies to waive pre-insurance photo inspections.

Bills to permit inspection waivers have been introduced since 2009. Gov. Kathy Hochul recently signed one with the lofty title of “Auto Insurance Consumer Relief Act” (A.3172-A/S.5889) that passed the legislature this summer.

The enactment of the Insurance Consumer Relief Act will allow insurers to waive these inspections beginning May 15, 2024 and is effective through October 1, 2027 when it sunsets. insurance providers may continue requiring the photos if they want.

Big I NY, the association for the state’s 12,000 independent insurance agents and brokers, which has long contended these inspections are unnecessary and unduly burdensome to policyholders, called the signing “a great day” for New York policyholders and insurance agents.

“For too long,” Ted Walsh, Big I NY board chair and president of Walsh Duffield agency, said in a press release, “the car insurance photo inspection mandate has been a burden and an inconvenience for hard-working New Yorkers. Modern solutions for combatting fraud have made the regulation unnecessary and obsolete.”

Currently, New York State law makes photo inspections mandatory for many drivers in order to obtain comprehensive or collision coverage. The industry contends that the law, originally enacted in the late 1970s, no longer serves a purpose and unnecessarily inconveniences consumers and small business owners. If buyers do not complete the photo inspection within 14 days, their collision and comprehensive coverage is terminated.

The law amends section 3411 of the insurance law to permit an auto insurer to waive the physical inspection requirement by filing a waiver with the state insurance regulator.

The existing inspection law was enacted to address problems of fraudulent damages to motor vehicles that were insured after the accident had been sustained. Those in favor of keeping the photo mandate have maintained that the requirement helps prevent fraud and lower rates for policyholders.

However, proponents of the new law argued that technology advances and vehicle tracking systems such as VIN etchings have made it more difficult for persons seeking to engage in insurance fraud. Also while some people may still attempt to purchase policies for phantom vehicles, special investigation units (SIUs) are equipped to identify such issues, they contended.

The industry maintained that the current regulation is complex and expensive for insurers to implement, which drives up the overall cost for all auto insurance. In addition, the industry noted that under current law, people who have no intention of committing auto insurance fraud can find at the time of an accident, that they have lost coverage for such an accident because no auto inspection was performed.

Topics Carriers Legislation Auto New York

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