What's happening
This bill allows insured individuals to replace a totaled car with a similar vehicle they find, covering transportation costs.
Why it matters
Empowers consumers. Gives insured individuals more control over the replacement of their totaled vehicle, allowing them to personally find a similar vehicle rather than relying solely on insurer-selected options or cash settlements.
Potential for better value. By choosing their own replacement within the regional market and using approved valuation manuals, consumers may find vehicles that better meet their needs or preferences, possibly at a better value than what the insurer might offer.
Responsibility for transportation costs. While providing more choice, the bill places the cost of transporting the replacement vehicle on the insured, which could affect the overall financial outcome for policyholders, depending on the distance and method required.
Impact on insurance practices. This change could shift how insurers handle total loss claims, potentially creating more negotiation and administrative steps, and may influence how quickly and smoothly claims are resolved.
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Who cares
Headline styles
Let Drivers Replace Totaled Cars
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to insurance
- Referred to insurance
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4463
2017-2018 Regular Sessions
IN SENATE
February 15, 2017
Introduced by Sen. TEDISCO -- 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 replacement of an automobile which is determined to be a total loss
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 3412 of the insurance law is amended by adding a new subsection (i) to read as follows::
(i) Whenever an insurer determines a private automobile to be a total loss, the insured shall have the right to replace the automobile with a substantially similar vehicle that he or she locates within the regional area using approved valuation manuals in determining the value of vehicles in New York, provided that the insured shall bear any transportation costs in obtaining such vehicle.
§ 2. This act shall take effect on the one hundred eightieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06490-01-7
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 replacement of an automobile which is determined to be a total loss
Purpose or general idea of bill
To ensure than 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 customer'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 customer. 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 customers 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 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.
Prior legislative history
05/14/2015:S.5510 REFERRED TO INSURANCE 01/06/2016:S.5510 REFERRED TO INSURANCE FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS :
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.