NY Gov. Vetoes Auto Coverage Bill After Protest from Insurers

Siding with insurers in the state, New York Gov. Andrew Cuomo vetoed a bill last week that legislators passed in the summer that would have automatically enrolled auto insurance policyholders into supplementary underinsured/uninsured motorist coverage (SUM).

A10784 would have required that policyholders opt-out of SUM coverage themselves, a process that Cuomo said “places such an unacceptable choice on New Yorkers.”

“Consumers should be free to choose what level of SUM coverage makes sense for them,” he said in his veto message. “I will not add to the financial burdens already faced by New York’s consumers.”

Drivers who buy auto insurance in New York are required to have uninsured motorist (UM) coverage that compensates them for medical costs in crashes caused by an uninsured or unknown motorist. SUM coverage adds onto UM policies, broadening protection to cover out-of-state crashes and allowing for increases of UM coverage limits.

A10784 was passed in June by the state Legislature before lawmakers adjourned for the summer; the bill was delivered to Gov. Cuomo on Dec. 5.

The New York Insurance Association (NYIA) said the bill was carelessly sped through the legislative process before being passed in the “final hours” of the legislative session, adding that it favored a “more transparent process of opting-in” over the bill’s opt-out provision.

“Individuals could end up paying a lot more for coverage that they didn’t even choose to have,” the NYIA stated in its July release protesting the legislation. The state trade organization counts dozens of insurers as its members.

Cuomo echoed the sentiment, saying that no other optional form of auto coverage enforces an opt-out clause like the one pursued in A10784.

“The Department of Financial Services will be exploring ways to increase consumer education on the benefits of SUM coverage so that consumers can make a more informed decision about whether or not to purchase it,” Cuomo said in his veto message.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

No comments yet.

Comment on this article