New York State Assembly

 
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A07738 Summary:

A07738 Actions:

A07738 Committee Votes:

Committee:CODES   Chair:Lentol      
DATE:05/17/2016AYE/NAY:17/2  Action: Favorable         
Lentol
Aye
Graf
Nay
Schimminger
Aye
Giglio
Aye
Weinstein
Aye
McKevitt
Excused
Brennan
Excused
Montesano
Nay
Wright
Aye
Ra
Aye
Pretlow
Aye
Tenney
Aye
Cook
Aye
Cymbrowitz
Aye
Titus
Aye
O'Donnell
Excused
Lavine
Aye
Perry
Aye
Zebrowski
Aye
Abinanti
Aye
Weprin
Aye
Mosley
Aye

A07738 Floor Votes:

A07738 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A7738A
 
SPONSOR: Magnarelli

 
TITLE OF BILL:  An act to amend the insurance law, in relation to
collision or comprehensive coverage on motor vehicles
 
 
PURPOSE OR GENERAL IDEA OF BILL:
 
The bill would protect the rights of insured motorists 'to have their
vehicles repaired at the shop of their choice. It does this by requiring
insurance companies to inform the insured of their rights under the law.
 
 
SUMMARY OF SPECIFIC PROVISIONS:
 
Amends Section 2610 of the Insurance LaWto require insurers to place in
the repair estimate a statement informing.the insured of their right to
have their vehicle repaired at a shop of their choice.
 
 
JUSTIFICATION:
 
An economic impact report prepared in 2006 by Frederic B. Jennings, Jr.,
Ph.D. for the NYS Auto Collision Technicians Association, Inc., provides
evidence that automobile insurance companies in New York State are arti-
ficially suppressing payment for labor rates paid to auto body repair
shops, and are thereby jeopardizing the safety of drivers on New York
roads. The report argues that suppression of labor rates has reduced the
quality of repairs completed in many auto body repair shops, and there-
fore has jeopardized driver safety.
 
In an effort to reduce costs, automobile insurance companies enter into
"preferred" shop agreements with auto body repair shops, such that the
preferred shop provides a discount to individuals insured by that insur-
ance company. Automobile insurance companies may then refer claimants to
those shops when asked for a referral-Under current law, insurance
companies are permitted to pay the lowest price estimate on repairs, as
long, as the repairs restore the vehicle to pre-accident condition.
 
The President of the Auto Collision- Technicians Association asserts
that member shops regularly see customers in need of re-repairs-for a•
poor job done by another body shop, generally the "preferred shop"
recommended by the insurance company: In most instances, the insurance
company must pay for the cost of the re-repair after significant hassle
and legal negotiation on the part of the consumer.  The Association
estimates that this need for regular re-repairs to fix poor initial
repair jobs actually has the effect of increasing auto insurance premi-
ums, despite the claims of auto insurance companies that suppression of
labor rates reduces monthly premiums to customers.
 
Preferred shops establish relationships with the insurers by agreeing to
complete repair work within the.price guidelines set by the insurance
companies. This practice Of establishing rigid price guidelines or caps
goes beyond the legitimate right of the insurer to negotiate the price
of repair. It has the effect of limiting consumer choices by dividing
repair shops into two groups: the cut-rate shops preferred by the insur-
ers, and independent shops which can be effectively black-listed by
insurance company policies and procedures.
 
 
 
The proposed legislation would require insurers to inform customers of
their right to select a repair shop and to make decisions regarding the
type of repair done to their vehicle.
 
 
PRIOR LEGISLATIVE HISTORY:
 
New bill. Similar to  A.1537 of 2015.
 
 
FISCAL IMPLICATIONS:
 
None.
 
 
EFFECTIVE DATE:
180 days after becoming law.

A07738 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7738--A
                                                                Cal. No. 678
 
                               2015-2016 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 26, 2015
                                       ___________
 
        Introduced by M. of A. MAGNARELLI, McDONALD -- read once and referred to
          the  Committee  on Insurance -- recommitted to the Committee on Insur-
          ance in accordance with Assembly  Rule  3,  sec.  2  --  reported  and
          referred  to  the  Committee  on  Codes  --  reported  from committee,
          advanced to a third reading, amended and ordered reprinted,  retaining
          its place on the order of third reading
 
        AN  ACT  to amend the insurance law, in relation to collision or compre-
          hensive coverage on motor vehicles
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Section  2610 of the insurance law is amended by adding a
     2  new subsection (c) to read as follows:
     3    (c) The insurer shall provide a copy of its  repair  estimate  to  the
     4  insured  that  includes  the following disclosure, plainly printed in no
     5  less than 12 point type: "PURSUANT TO SECTION 2610 OF THE INSURANCE LAW,
     6  AN INSURANCE COMPANY CANNOT REQUIRE THAT REPAIRS  BE  MADE  TO  A  MOTOR
     7  VEHICLE IN A PARTICULAR PLACE OR REPAIR SHOP. YOU HAVE THE RIGHT TO HAVE
     8  YOUR VEHICLE REPAIRED IN THE SHOP OF YOUR CHOICE".
     9    § 2. This act shall take effect on the one hundred eightieth day after
    10  it shall have become a law and shall apply to all policies and contracts
    11  issued, renewed, modified, altered or amended on or after such effective
    12  date;  provided,  however,  that  effective  immediately,  the addition,
    13  amendment and/or repeal of any rule  or  regulation  necessary  for  the
    14  implementation  of  this  act  on  its effective date are authorized and
    15  directed to be made and completed on or before such effective date.
 
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11279-05-6