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History
- Referred to insurance
- Referred to insurance
Companion bill
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In relation to replacement of an automobile which is determined to be a total loss
In Assembly Committee · Insurance · Sponsor James Tedisco
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S5510
Title of bill
An act to amend the insurance law, in relation to replacement of an automobile which is determined to be a total loss
Purpose
To ensure that an individual has a greater ability to receive a substantially similar vehicle in the event their private automobile is deemed to be a total loss.
Summary of provisions
Section 3412 of the Insurance Law is amended to provide that an insured individual shall have the right to have a private automobile, which is declared a total loss, replaced with a substantially similar vehicle that he or she locates within the regional area covered by approved valuation manuals.
Justification
Current regulations of the Insurance Department set forth rules for making cash settlements or obtaining a substantially similar replacement vehicle in situations where a consumer's damaged vehicle is considered to be a total loss.
The regulations specify that, if the insurance company determines to replace the vehicle, the replacement car shall be an immediately available and substantially similar vehicle which can be obtained at a qualified dealer located reasonably convenient to the consumer. Reasonably convenient is deemed to be within 25 miles of the consumer's place of principal garagement. This distance requirement seeks to ensure that the insurance company doesn't burden the consumer by making him or her travel a long distance to get the replacement vehicle.
While this distance standard applies to the insurance company, some insurers have also interpreted this regulation to mean that consumers do not have the option of agreeing to receive a substantially similar vehicle that is located beyond the 25 mile range.
However, some consumers really like their previous vehicle and may prefer to obtain a replacement vehicle instead of receiving a cash settlement. Given the ease of using the internet to identify cars which are available, consumers have a much greater opportunity to locate a substantially similar vehicle at dealerships throughout New York, or even in neighboring states.
If the consumer is willing to find such a vehicle, and is willing to travel to pick it up (at their own expense), they should have the right to do so. They should not be limited by the 25 mile distance standard, which was intended to prevent insurance companies from burdening consumers, rather than limiting consumer options.
The bill should not impose additional costs on insurance companies. The availability of a car is limited to the multistate region covered by the approved valuation manuals, so values would be the same regardless of whether the dealership is within the 25 mile radius or located outside such radius. In addition, the bill clarifies that any additional transportation expenses involved in acquiring a car located at a distant site would be borne by the consumer.
Legislative history
New bill
Fiscal implications
None
Effective date
On the 180th day after it shall have become a law
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.