BILL NUMBER:S5510

TITLE OF BILL:

An act to amend the insurance law, in relation to replacement of an
automobile which is determined to be a total loss

PURPOSE:

To ensure that an individual has a greater ability to receive a
substantially similar vehicle in the event their private automobile is
deemed to be a total loss.

SUMMARY OF PROVISIONS:

Section 3412 of the Insurance Law is amended to provide that an
insured individual shall have the right to have a private automobile,
which is declared a total loss, replaced with a substantially similar
vehicle that he or she locates within the regional area covered by
approved valuation manuals.

JUSTIFICATION:

Current regulations of the Insurance Department set forth rules for
making cash settlements or obtaining a substantially similar
replacement vehicle in situations where a consumer's damaged vehicle
              

is considered to be a total loss.

The regulations specify that, if the insurance company determines to
replace the vehicle, the replacement car shall be an immediately
available and substantially similar vehicle which can be obtained at a
qualified dealer located reasonably convenient to the consumer.
Reasonably convenient is deemed to be within 25 miles of the
consumer's place of principal garagement. This distance requirement
seeks to ensure that the insurance company doesn't burden the consumer
by making him or her travel a long distance to get the replacement
vehicle.

While this distance standard applies to the insurance company, some
insurers have also interpreted this regulation to mean that consumers
do not have the option of agreeing to receive a substantially similar
vehicle that is located beyond the 25 mile range.

However, some consumers really like their previous vehicle and may
prefer to obtain a replacement vehicle instead of receiving a cash
settlement. Given the ease of using the internet to identify cars
which are available, consumers have a much greater opportunity to
locate a substantially similar vehicle at dealerships throughout New
York, or even in neighboring states.

If the consumer is willing to find such a vehicle, and is willing to
travel to pick it up (at their own expense), they should have the
right to do so. They should not be limited by the 25 mile distance
standard, which was intended to prevent insurance companies from
burdening consumers, rather than limiting consumer options.


The bill should not impose additional costs on insurance companies.
The availability of a car is limited to the multistate region covered
by the approved valuation manuals, so values would be the same
regardless of whether the dealership is within the 25 mile radius or
located outside such radius. In addition, the bill clarifies that any
additional transportation expenses involved in acquiring a car located
at a distant site would be borne by the consumer.

LEGISLATIVE HISTORY:

New bill

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:

On the 180th day after it shall have become a law