American Property Casualty Insurance Association (APCIA) officials recently detailed the New York Legislature’s passage of legislation (S6028 and A6877) updating state insurance laws.
If signed into law, the legislation would enable insurers to dispense with or defer inspections of private passenger automobiles before providing coverage for physical damage.
“The insurance photo inspection in many instances is unnecessary and not at all related to safety,” APCIA Vice President Kristina Baldwin said. “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.”
The APCIA said insurance companies determined additional cost-effective ways to combat fraud, deeming it unnecessary to continue forcing policyholders to comply with the prior 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,” Baldwin said. “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 to provide insurers and consumers the choice as to whether they believe that the inspection is warranted.”