S.5644-A (Seward) / A.5445-A (Morelle)




S.5644-A (Seward) / A.5445-A (Morelle)


Limitations on Supplementary Insurance Coverage



The Business Council opposes S.5644-A (Seward) / A.5445-A (Morelle), which seeks to require automobile insurance policies to provide supplementary uninsured/underinsured motorist (SUM) coverage equal to a policy’s bodily injury liability limits, unless the policyholder affirmatively selects a different amount or declines the coverage when the insurance policy is sold, purchased or negotiated.

This is another example of legislatively attempting to micromanage an industry that is already entrenched in myriad legislative and regulatory mandates and reporting requirements that in essence ensure that policyholders are provided with significant information – opportunity to question rates that are quoted and to effectuate the appropriate insurance policy to match the needs of the policyholder.

This proposal contravenes what is already in place and effectively working.  For example, the insurer must include in a renewal policy increased SUM coverage levels which match the levels of bodily injury liability coverage and charge additional premiums. Embedding this additional charge in a comprehensive document will lead to confusion by the insured – some receiving coverage they did not actually intend to purchase. Others may refuse to pay for the additional charges now part of their contract and lack of payment can result in cancellation of the entire policy. This is not how business and government should be working.  If the intent is to ensure consumers are given the opportunity to initiate an insurance policy or renewal with provisions appropriate for their circumstances, then the policy should not be required to incorporate provisions that will be retained absent affirmatively opting out of the inclusion of the higher premium coverage amount.

Many of the provisions of the legislation will lead to confusion not only for the insurers in providing appropriate documents for the policyholder’s needs, but also the burden and confusion upon the insured to comprehend what they are accepting in the policy and what they actually have the opportunity of disregarding.

Currently, there are significant safeguards in the law and regulations that require insurers to offer SUM coverage up to $250,000 for injury or death to one person/$500,000 for injury or death of two or more persons. In addition, notice must be provided with all new policies and at each renewal explaining SUM coverage and the right to purchase SUM coverage.  Regulation11 NYCRR 60-2.2 requires notice to include examples to illustrate the proper application of SUM coverage.  Giving the policyholder the benefit of the options available to them is significant and should not be thrust upon  them as a given – rather keeping the playing field such that the consumer is consciously and appropriately choosing the coverage that best meets their insurance and financial needs.

For these reasons, The Business Council opposes S.5644-A / A.5445-A.