American Property Casualty Insurance Association: New York Legislature Modernizes Insurance Laws

ALBANY, New York, June 4 (TNSreact) -- The American Property Casualty Insurance Association issued the following news release:

The New York Legislature passed legislation (S6028/A6877) during the closing days of the session that updates the state's insurance laws by allowing an insurer to waive the requirement to conduct a photo inspection of a motor vehicle prior to issuing an auto insurance policy that provides physical damage coverage.

The photo inspection requirement was a relic of a 1970s effort to combat insurance fraud where an individual would attempt to secure coverage on vehicles which did not exist (phantom vehicles) so that they could report the vehicle stolen and file an insurance claim.

"The insurance photo inspection in many instances is unnecessary and not at all related to safety," said Kristina Baldwin, Vice President for APCIA. "Back in the 1970s it may have made sense to require photo documentation to verify the existence, physical condition, and the vehicle's options. However, technological, and other fraud fighting advances since that time have made this requirement obsolete. There are now more convenient or cost-effective ways to address this fraudulent activity. We are pleased that New York is updating its laws to make this approach optional."

In most cases, insurance companies have found more convenient or cost-effective ways to fight fraud. As a result, it is not necessary to continue to force policyholders to comply with an outdated requirement. "Complying with the inspection requirement is costly and can be inconvenient for the consumer who must take time out of their busy schedules to take their cars to be inspected and, in the event that they forget to do so, the insurer is required to suspend coverage. Given the cost, inconvenience, and potential consumer peril for failing to secure the insurance inspection, insurers have sought legislation to make this requirement optional over many legislative sessions. It was time provide insurers and consumers the choice as to whether they believe that the inspection is warranted," said Baldwin.