Insurers Oppose New York Legislative Changes
The legislature adopted the New York auto insurance legislation S7787/A10784 on the last day of the past session. This was an amendment to the existing law for supplementary uninsured and underinsured (SUM) coverage, and watered down the choices available to the consumer. The current regulations say that policyholders must now opt out of their increased coverage for SUM, instead of the previous opt in process that was more transparent to consumers.
The impact of this legislation could drive premiums sharply upward, and many drivers may end up forking over more money than necessary for coverage that they didn’t specifically select to be a part of their New York auto insurance policy. This most recent legislation also involves a provision that is related to the no fault system, but that isn’t a part of an effort against fraudulent use of the system. The New York Insurance Association fears that the bill’s negative impact could be worsened by the fact that there was no meaningful reform passed by the legislature to the no fault system.
A similar issue was debated in Ontario in 2010 with the introduction of the most recent reforms. At the time standard coverages for medical and rehabilitation expenses, attendant care and caregiver and housekeeping expenses were being reduced. There were parties suggesting to the government that consumers should be renewed with their existing coverages and offered the option of buying down to the new standard coverages. The government chose to require that consumers have their coverages lower at renewal with the option of buying back up.