What's happening
This bill prohibits auto insurers from canceling, refusing to renew, or changing policies solely due to disputed claims or related complaints.
Why it matters
Protects policyholders from retaliation. By preventing insurers from canceling, refusing to renew, or changing terms solely due to disputed claims or related complaints, the bill shields consumers from potential punitive actions for exercising their rights.
Encourages legitimate dispute resolution. Policyholders can dispute claims or file complaints with the Department of Financial Services without fear that doing so will jeopardize their auto coverage, promoting fairness and transparency in the claims process.
Limits insurer leverage. Insurers can no longer use the threat of policy cancellation or unfavorable changes as leverage to discourage customers from challenging denied claims or reporting grievances, leading to a more balanced relationship between consumers and insurance companies.
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Who cares
Headline styles
Protect Drivers’ Insurance Renewals
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Protect Drivers’ Insurance Renewals
Assembly Floor Calendar · Sponsor N. Nick Perry
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3757
2017-2018 Regular Sessions
IN SENATE
January 26, 2017
Introduced by Sen. HAMILTON -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to prohibiting an insurer from cancelling or refusing to renew or condition its renewal of automobile insurance policies in certain cases
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 3425 of the insurance law is amended by adding a new subsection (t) to read as follows:
(t) No insurer shall cancel or refuse to renew a policy covering a private passenger automobile, or to condition its renewal upon change of limits or elimination of any coverages solely on the basis that a claim filed by the insured with the insurer is in dispute, or that a complaint by the insured against the insurer resulting from the disputed claim is pending with the department.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06342-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to prohibiting an insurer from cancelling or refusing to renew or condition its renewal of automobile insurance policies in certain cases
Purpose
To prohibit insurers from canceling or refusing to renew or condition its renewal of automobile insurance policies solely on the bases that there is a pending complaint filed by the insured, or that a claim filed by the insured with the insurer is in dispute.
Summary of specific provisions
Section one of the bill amends § 3425 of the insurance law by adding a new subsection (t) which requires that automobile insurance policies, except for nonpayment of premium, shall not be cancelled or refused renewal due to a pending claim filed against the insured.
Section two of the bill provides the effective date.
Justification
Currently, under subsection (f) of § 3425 of the insurance law, an insurer may non-renew up to two percent of its non-commercial motor vehicle policies during each calendar year. The purpose of the two percent provision was to afford insurance companies some protection from policyholders who may be high risks, and to allow for some flexibility in these cases. Consequently, many insurance companies have abused this two percent provision by using it in cases where policyholders have had claim disputes and subsequently have filed complaints with the department against the carrier. This legislation seeks to help protect consumers from having their policies terminated due to claim disputes or their filing of complaints. Consumers should not have to suppress or lose their right to openly and appropriately protest arbitrary and unfair claim settlement practices by insurance companies due to fear of the loss of coverage.
Prior legislative history
New bill
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.