What's happening
This bill allows auto insurers to offer lower, zero, or diminishing deductibles for physical damage coverage, with required disclosures and consumer protections.
Why it matters
Expands consumer choice. by letting drivers select lower, zero, or decreasing deductibles for physical damage coverage, potentially making repairs more affordable after an accident, especially for those who prefer less out-of-pocket risk.
Mandates clear disclosure. from insurers about how these new deductible options work—including any extra costs, when and how deductibles shrink, and how premiums might be affected—helping consumers make informed decisions and avoid surprises.
Adds consumer protections. by prohibiting insurers from penalizing policyholders twice (e.g., both raising premiums and deductibles for a single claim), reducing the risk of unexpected financial consequences after an accident.
Could spur market competition. among insurers to offer more attractive deductible options, possibly leading to innovations in insurance products and better alignment with individual customer needs and preferences.
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Who cares
Auto physical damage insurers
The bill would let them offer reduced, zero-dollar or diminishing deductibles while requiring disclosures about costs, policy interactions and possible deductible changes.
Drivers shopping for auto insurance
They could be offered deductibles below existing minimums, including deductibles that shrink over time and may reach zero.
Policyholders with reduced, zero-dollar or diminishing deductibles
Insurers could not raise both their premium and deductible in response to the same claim or incident, but could raise either one.
Headline styles
Lower Car Insurance Deductibles
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
No co-sponsors yet.
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.
Lower Car Insurance Deductibles
In Assembly Committee · Insurance · Sponsor Vivian Cook
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5503
2019-2020 Regular Sessions
IN SENATE
May 3, 2019
Introduced by Sen. COMRIE -- 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 deductibles for physical damage insurance
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (k) of section 3411 of the insurance law is amended to read as follows:
(k) (1) Each insurer which offers physical damage insurance subject to the provisions of this section shall offer such insurance with a standard deductible of two hundred dollars for each occurrence. The insured shall, however, at the inception of the policy or at the annual anniversary date, or at the time of the replacement or addition of an automobile, have the option of purchasing a policy with a lesser deductible, but in no event may the insurer sell a policy with a deductible of less than fifty dollars for fire, theft or comprehensive insurance coverages (one hundred dollars for assigned risk policies issued pursuant to paragraph two of subsection (a) of section five thousand three hundred three of this chapter) and one hundred dollars for collision insurance coverage except that window glass coverage may be sold without a deductible. Each insurer which offers physical damage insurance subject to the provisions of this section shall also offer physical damage coverages with co-insurance or deductible provisions or combinations thereof as the superintendent may prescribe, including but not limited to deductibles of two hundred fifty dollars, five hundred dollars and one thousand dollars.
(2) Notwithstanding the dollar limits for deductibles in paragraph one of this subsection, an insurer which offers physical damage insurance subject to the provisions of this section may offer a reduced dollar deductible, a zero dollar deductible or a deductible that diminishes over time and may ultimately be reduced to zero dollars.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07992-01-9
S. 5503 2
(3) An insurer who offers a reduced dollar deductible, a zero dollar deductible or a deductible that diminishes over time shall disclose to the insured or potential insured at the time such a deductible is offered or a policy that has such a deductible is renewed how such a deductible would interact with the other provisions of the insured's policy, any additional cost to the insured for having such a deductible, the circumstances under which the deductible may be reduced or diminished, if and under what circumstances the deductible may be increased, and the effect that the deductible may have upon the insured's premium.
(4) Under no circumstances shall an insurer penalize an insured who has a reduced dollar deductible, a zero dollar deductible or a deductible that diminishes over time by increasing both the insured's premium and deductible in response to the same claim or incident. This paragraph shall not be construed to prohibit an insurer from increasing either the insured's premium or deductible in response to the same claim or incident.
§ 2. This act shall take effect immediately.
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 deductibles for physical 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 lan
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
Previously introduced; 2017/18 A.3269
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.