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  1. Agents cannot charge service fees | Ask PIA

    Is it legal for an insurance agent to add a service fee to agency-billed premium invoices?

    No. Service fees can never simply be billed. They must be agreed to by the client via a signed memorandum. Moreover, an insurance agent, acting in this capacity, cannot charge a service fee to a policyholder for functions relating to placing and servicing an insurance policy. Only when an insurance...

  2. Material misrepresentation—claim denial | Ask PIA

    Could a material misrepresentation on an application for a commercial policy be grounds for denying a claim presented under the policy?

    Yes, it is possible. New York requires fraud warnings to appear on applications for commercial policies, immediately above the applicant’s signature.The warning for commercial policies states, “Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim...

  3. Timely investigation of auto claim | Ask PIA

    Our client is involved in a personal auto claim that has been going on for more than 45 days. The police report states that the other driver left the scene of the accident. The carrier is stating that it hasn’t determined the amount of fault. We thought that when drivers...

    Even if a driver left the scene, the carrier still should investigate to determine the comparative negligence, if any, by taking statements and gathering the facts. The carrier must report to the claimant on its progress every 60 days, and may take up to six months to make its decision....

  4. Partners, executive officers | Ask PIA

    We insure a wholesale store with only two employees who are the owners of the business. Their accountant said they don’t need to carry a workers’ compensation policy, since they both are owners. Is this true?

    If these owners are partners, the answer is yes. Sole proprietors and partners (of partnerships defined in Section 10 of the Partnership Law) are not required to insure themselves, only their employees. This is because the law does not consider them employees subject to the law, although they can voluntarily...

  5. ‘Safe place to work’ exposure | Ask PIA

    A question has arisen due to a suit by a subcontractor’s employee against the general contractor for negligence in maintaining the premises. How can the owner of the project be protected?

    New York’s Labor Law (Sections 240, 241 and 241-a) imposes strict liability on owners and general contractors for workers injured at their job sites, where violations of safety regulations or gravity-related risk is involved in the erection, demolition, repairing, altering, painting, cleaning, or pointing of a building or structure. The courts...

  6. Livery use exclusion | Ask PIA

    Our insured, a corrections officer, uses his own car to transport prisoners to the doctor, etc. He is reimbursed by his employer. Is coverage for liability excluded by the personal auto policy’s public or livery conveyance exclusion?

    This exclusion was not intended for this type of situation. In American Fidelity Fire Insurance Co. v. Pardo (1969), the court stated that the words “public or livery conveyance” in the exclusionary clause referred to a vehicle used indiscriminately in conveying the general public, without limitation to certain persons or particular...

  7. After-market parts | Ask PIA

    An adjuster called my insured offering to repair his car using after-market parts. Can the company do this?

    Yes, but certain criteria have to be met. According to New York Regulation Section 216.7 Unfair Trade Practices, there are seven points the estimate must include if the insurer’s repair estimate is based upon the use of any “non-original equipment manufacturer” crash part: the estimate shall specify the non-OEM...

  8. Inexperienced operator surcharge | Ask PIA

    An applicant came in for auto insurance. He held a driver’s license from age 18 to 25 but then let it lapse for four years. Now, at 29, he has taken the test and received a new driver’s license. We are writing him in the New York Automobile Insurance Plan....

    According to Rule 28 of the New York Automobile Insurance Plan manual, as long as your insured can provide documentation that he has been previously licensed for a total of three years (excluding any periods of revocation or suspensions) he will not be considered an inexperienced operator. If he cannot...

  9. Voluntary supplement won’t cut worker’s benefits | Ask PIA

    One of my clients is an employer, a key employee of whom has sustained an on-the-job injury. The employee will be disabled for a number of months, and the employer has filed a workers’ compensation claim. The insurance company has agreed to pay the injured worker the maximum disability benefit...

    No. The voluntary payment by the employer would not affect the workers’ compensation benefit, according to a Workers’ Compensation Board examiner and Section 30 of the New York Workers’ Compensation Law, which reads as follows: No benefits, savings or insurance of the injured employee, independent of...

  10. Defensive-driver course | Ask PIA

    I have an insured in the New York Automobile Insurance Plan who has taken an approved defensive-driving course. The course allowed him to reduce his motor vehicle violation points from six to two. But is he also eligible for a 10% premium credit?

    Yes, according to Circular Letter 1980-1, neither the principal operator’s accident or violation record nor his years of driving experience, affect his eligibility for the premium reduction provided by the completion of the defensive-driving course. The circular letter states that the discount received for taking a defensive-driving course is...

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