•  Summary 
  •  
  •  Actions 
  •  
  •  Committee Votes 
  •  
  •  Floor Votes 
  •  
  •  Memo 
  •  
  •  Text 
  •  
  •  LFIN 
  •  
  •  Chamber Video/Transcript 

A01193 Summary:

BILL NOA01193
 
SAME ASSAME AS S02678
 
SPONSORLunsford
 
COSPNSR
 
MLTSPNSR
 
Amd §7902, Ins L
 
Relates to service contracts for accidental damages from handling and power surges.
Go to top    

A01193 Actions:

BILL NOA01193
 
01/13/2023referred to insurance
01/03/2024referred to insurance
Go to top

A01193 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1193
 
SPONSOR: Lunsford
  TITLE OF BILL: An act to amend the insurance law, in relation to service contracts for accidental damages from handling   PURPOSE OR GENERAL IDEA OF BILL: This bill amends the definition of "service contract" to confirm that coverage for power surges and accidental damage from handling is not incidental coverage and may be offered separately from other service contract coverage and therefore protect the consumer beginning on the date their covered device is purchased.   SUMMARY OF PROVISIONS: Section 1 of the bill amends section 7902(k) of the insurance law to confirm that service contract coverage for power surges and accidental damage from handling is primary coverage that may begin on the date a covered device is purchased. Section 2 is the effective date.   JUSTIFICATION: Primary service contract coverage offers benefits comparable to a manufacturer's limited warranty (i.e. coverage for defects in materials and workmanship or wear and tear). Service contract coverage is supple- mental to a manufacturer's warranty. To avoid unintentionally selling duplicative coverage, primary service contract coverage may not begin until the manufacturer's warranty expires. Service contracts often also provide protection against power surges and accidental damage from handling, but manufacturers' warranties usually do not provide such coverage. Currently, the NYS Department of Financial Services interprets Insurance Law § 7902(k) to state that coverage for power surges and accidental damage from handling is only permissible as incidental coverage and therefore, it must share the primary coverage's term length (effective and expiration dates). Since a manufacturer's warranty does not provide protection against power surges and accidental damage from handling, and since a service contract's protection against these perils may not begin until the manufacturer's warranty expires, consumers are often left exposed and without coverage against these perils during the term of the manufactur- er's warranty. This bill amends the Insurance Law to clarify that coverage for power surges and accidental damage from handling is not incidental coverage, and such coverage may be offered commencing on the date of purchase of a covered device and may run concurrently with the manufacturer's warran- ty. This change will provide substantial protection to consumers who might otherwise end up paying the full replacement cost for a covered device due to a power surge or accidental damage from handling during the term of the manufacturer's warranty.   PRIOR LEGISLATIVE HISTORY: A.10591 of 2021-22: referred to Insurance   FISCAL IMPLICATIONS: None to the State.   EFFECTIVE DATE: This act shall take effect immediately.
Go to top

A01193 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1193
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 13, 2023
                                       ___________
 
        Introduced by M. of A. LUNSFORD -- read once and referred to the Commit-
          tee on Insurance
 
        AN  ACT to amend the insurance law, in relation to service contracts for
          accidental damages from handling
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subsection  (k)  of section 7902 of the insurance law, as
     2  separately amended by chapter 247 of the laws of 2019 and section  1  of
     3  subpart  Q  of  part XX of chapter 55 of the laws of 2020, is amended to
     4  read as follows:
     5    (k) "Service contract" means a contract or agreement, for  a  separate
     6  or  additional  consideration,  for  a  specific duration to perform the
     7  repair, replacement or maintenance of property, or  indemnification  for
     8  repair,  replacement  or  maintenance,  due  to a defect in materials or
     9  workmanship or wear and tear, power surges or  accidental  damages  from
    10  handling,  with  or  without additional provision for indemnity payments
    11  for incidental damages, provided any such indemnity payment per incident
    12  shall not exceed the purchase price of the property serviced.    Service
    13  contracts  may  include  towing, rental and emergency road service[, and
    14  may also provide for the repair, replacement or maintenance of  property
    15  for damage resulting from power surges and accidental damage from handl-
    16  ing]. Service contracts may also include contracts to repair, replace or
    17  maintain residential appliances and systems. Such term shall also mean a
    18  contract or agreement made (1) by or for the manufacturer or seller of a
    19  motor vehicle tire for repair or replacement of the tire or wheel as the
    20  result  of damage arising from a road hazard, (2) by or for the supplier
    21  or seller of a service for repair of chips or cracks in a motor  vehicle
    22  windshield,  but  not including services that involve the replacement of
    23  the entire windshield, (3) by or for the supplier or seller of a service
    24  for repair or removal of dents, dings or creases from  a  motor  vehicle
    25  without  affecting the existing paint finish using paintless dent repair
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01944-01-3

        A. 1193                             2
 
     1  techniques, but not including services that involve the  replacement  of
     2  vehicle  body panels, or sanding, bonding or painting; and (4) by or for
     3  the supplier or seller of a service for repair or replacement of a motor
     4  vehicle  key  or  key  fob  in the event that the key or key fob becomes
     5  inoperable, lost or stolen. In conjunction with a motor  vehicle  leased
     6  for  personal  use,  such term shall also mean a contract to perform the
     7  repair, replacement or maintenance of property, or to provide indemnifi-
     8  cation for repair, replacement or maintenance, due to  excess  wear  and
     9  use or damage for interior stains, rips or scratches or missing interior
    10  parts  that  result  in  a  lease-end  charge not otherwise covered by a
    11  service agreement or warranty,  provided  any  such  payment  shall  not
    12  exceed the purchase price of the vehicle.
    13    § 2. This act shall take effect immediately.
Go to top