Reacting to Big I New York’s successful effort last year to make the automobile photo inspection requirement optional, the New York State Department of Financial Services has proposed a major amendment to the regulation that implements the law. All members of the public can submit comments on the proposal.
The department formally published the amendment in the April 3, 2024 issue of New York State Register. It changes Part 67 of Title 11 of the New York Codes, Rules, and Regulations (also known as “Insurance Regulation 79.”) The New York Department of State publishes the New York State Register each Wednesday. It is the weekly publication of all regulatory actions state government agencies take and administrative actions the governor takes.
Last November, New York Gov. Kathy Hochul signed into law Assembly Bill number 3172-A. This bill was Big I New York’s highest legislative priority in 2022 and 2023. It amended New York Insurance Law Section 3411 to permit insurance carriers to waive photo inspections of the automobiles they insure against physical damage. Current law requires the carriers to inspect the vehicles before insuring them against physical damage. The change lifted a significant burden from New York insurance consumers and from the insurance producers who serve them.
The change to the law takes effect on May 15, 2024, and will expire on October 1, 2027. Big I New York intends to do everything it can to convince the legislature and governor to make the change permanent.
The amendment to Regulation 79 proposed today makes an insurer responsible for conducting an inspection “(u)nless (it) has filed with the superintendent (of financial services) a statement waiving its right to inspections for all automobiles …” It requires an insurer wishing to waive its right to inspect vehicles to submit a revised plan of operation. The plan must specify the vehicles it will and will not inspect.
The amendment strikes the word “mandatory” from the regulation’s text in several places. However, there are five other significant changes:
- The section that formerly permitted an insurer to waive inspections of certain vehicles now states that “(a)n insurer may waive an inspection for any automobile …”
- Insurers will still have the option of requesting copies of lease agreements, window stickers, bills of sale, or transfer of ownership forms, even if it has waived the right to an inspection. The insurer also has the right to withhold payment of a physical damage claim unless and until it receives those materials. It can also non-renew the policy if it has not received them.
- The insurer has the right to require an inspection if the prior insurer’s representative did not inspect the vehicle.
- The New York Automobile Insurance Plan (NYAIP) has the option of waiving the inspections.
- The amendment includes new forms for insurers to use if they do not waive the inspections.
Members of the public who wish to submit comments to the department may email them to Joana.Lucashuk@dfs.ny.gov. We encourage all interested Big I New York members to do so. The department will accept comments until the end of the day June 3, 2024.