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  1. Auto total loss—valuations | Ask PIA

    Our insured recently purchased a used vehicle, which then was totaled in a crash. The company is offering less than the book value of the car, based on the amount shown on the bill of sale. Can they do this?

    Probably, because Regulation 64 states: If the method used in subparagraph (i), (ii) or (iii) of this paragraph would result in a settlement offer greater than the purchase price plus the cost of substantiated improvements paid by the insured for a vehicle purchased within the 180 calendar days...

  2. Auto theft claims—what’s covered? | Ask PIA

    On a theft settlement, is it legal for a company to deduct amounts for the extended warranty, alarm and anti-theft jack? Shouldn’t these items be covered as “equipment”?

    The policy covers direct and accidental loss to “your covered auto,” including its equipment, minus any applicable deductible. So, the alarm and anti-theft jack should be covered. On the other hand, consequential economic losses generally are not covered unless specifically addressed by policy provision or regulation. “All monies paid or...

  3. Newborn coverage | Ask PIA

    We have noticed that our health insurance companies have various procedures when it comes to covering newborns. Some require the insured to provide notification, some require notification plus payment of an additional premium, some impose a separate deductible on the child’s coverage. What are the rules governing newborn coverage?

    Provisions governing commercial policies (individual and group) are found in Section 4235(f)(2) of the New York Insurance Law: “... any family coverage available under [the article of Insurance Law governing commercial health insurance companies] shall provide that coverage of newborn infants, [including adopted newborns if the insured...

  4. Advertising ’free rate quotes’ | Ask PIA

    Is it permissible for a producer or an insurer to advertise that it provides “free rate quotes” for automobile insurance?

    Yes. The Insurance Law and regulations do not prevent this type of advertising, as long as fees (e.g., motor vehicle abstract fees) are not charged.

  5. Total loss salvage arrangements | Ask PIA

    Our insured’s car was totaled. The insurer is saying it will deduct $500, the salvage value of the car, from the insured’s settlement; and our insured will have the responsibility of getting rid of the car. Is this legal?

    New York State Insurance Regulation 64, governing claims-settlement practices, states: If the insurer, in the process of adjusting a total loss, makes a deduction for the salvage value of the insured vehicle, the insurer must furnish the insured, upon the insured’s request, with the name and address of a...

  6. Personal auto quotes | Ask PIA

    When a person decides on coverage options based on the scenarios, do we need to provide quotes for all of the companies that we represent that are open to writing new business or just one?

    You must provide “quotes” for all companies you represent. While the regulation makes it clear that agents need only provide “scenarios” for one company, the current requirement for agents to “quote” all of their companies is still maintained. Therefore, once the person decides on the coverage options, agents still would...

  7. Prohibited vehicles | Ask PIA

    Our auto insurance companies have lists of vehicles they refuse to insure. Suppose one of our existing clients buys one of these vehicles?

    This question was addressed by the New York State Department of Financial Services in response to a real-life case, in the department’s April 1996 Bulletin. A customer had asked his insurance agent to add a Jeep CJ-7 to his already existing auto insurance policy (he had been with the carrier for...

  8. SUM consent-to-settle provision | Ask PIA

    A company has denied a claim for supplementary uninsured motorists coverage benefits because our insured accepted a settlement from the at-fault driver’s insurer without getting the SUM carrier’s consent. Can the company deny this claim?

    For policies issued or renewed prior to Oct. 1, 1993, the company would have been within its rights under an exclusion contained in all SUM endorsements used prior to that date. This exclusion is prohibited in policies issued or renewed on or after that date, when amendments to Regulation 35-D...

  9. NYAIP: Minimum commission | Ask PIA

    On New York Automobile Insurance Plan business, can a producer be billed for commission on earned premium that the insurer has not collected from the insured?

    Section 21.B.5 of the New York Automobile Insurance Plan manual states that a producer is entitled to a minimum commission of $35 or 10% of the correct earned premium, whichever is greater. So, the commission a producer is entitled to receive is based on premium earned, not premium collected.

  10. New York tow truck coverage | Ask PIA

    Our insured, a vehicle dealer, maintains a tow truck solely to move its own stock around. Does the insured have to purchase New York’s special tow truck liability coverage?

    No. The Vehicle and Traffic Law that requires tow truck liability insurance (Section 345) also defines a “tow truck” (Section 148-b) as any vehicle that tows or carries disabled vehicles, illegally parked vehicles, abandoned vehicles or vehicles involved in accidents. In addition, the vehicle must have a gross vehicle weight...

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