BILL NUMBER: S4935
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the insurance law, in relation to deductibles for phys-
ical damage insurance
 
PURPOSE:
The purpose of the legislation is to permit automobile insurance compa-
nies to reduce or zero out automobile physical damage deductibles.
 
SUMMARY OF PROVISIONS:
This bill would amends insurance law section 3411(k) to allow auto
insurance companies to offer a reduced dollar deductible, a zero dollar
deductible, or a deductible-that diminishes over time for automobile
physical damage. This bill would also include certain consumer
protections, including requiring the insurer to disclose to the consumer
any additional cost for the deductible and the effect that the deduct-
ible may have upon the consumer's premium and prohibiting an insurer
from raising both the insured's deductible and the insured's premium in
response to the same-claim or incident.
 
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 anniver-
sary 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 phys-
ical 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, consul-tiers 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:
2023-2024: S5538 Comrie/ A2779 Cook
2021-2022: S5503/ A3061 Previously introduced;
2017/18 A.3269
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S4935: 3411 insurance law, 3411(k) insurance law