Relates to limits on certain supplementary insurance

BILL NUMBER:S7781

Title of bill

An act to amend the insurance law, in relation to limits on certain supplementary insurance

Purpose

Provides that insurance companies must provide motorists with supplementary insurance coverage equal to bodily injury liability coverage, unless the insured specifically accepts lower supplementary insurance coverage in writing.

Summary of provisions

This bill would change the required amount of supplementary uninsured/underinsured motorist (SUM) coverage from a maximum amount that is the same as bodily injury to a minimum amount that is the same as bodily injury. In addition, this bill would automatically require the purchase of SUM coverage but also give the insured the option to decline SUM coverage or to purchase lower amounts than the statutory minimum. The insurer or agent would be required to disclose to the insured what SUM coverage is and how much the insured may purchase. If the insured declines to purchase SUM coverage, he or she must acknowledge the declination in writing.

Justification

This bill would amend the insurance law in relation to unknowingly waiving supplementary insurance coverage. Supplementary insurance, also known as uninsured or underinsured motorist insurance, protects motorists who suffer severe and devastating injuries in accidents with drivers who carry inadequate or no insurance. Few drivers are aware of the value of supplementary insurance and insurance companies rarely offer supplementary insurance coverage above the statutory minimum This bill will ensure that drivers are fully protected by supplementary insurance, equal to the bodily injury liability insurance coverage they select, unless they affirmatively elect lower coverage.

Legislative history

New bill.

Fiscal implications

None.

Effective date

This act will take effect on the 180th day after it shall have become a law.