Insurance industry trade groups herald the new law, which allows insurers to waive pre-insurance inspections, noting it was a long time in the making.
The purpose of pre-insurance inspections is to prevent fraud and reduce the cost of full-coverage auto by accurately documenting a vehicle’s condition, according to Carco Group, the company that performs these inspections.
New York Governor Kathy Hochul signed into law the Auto Insurance Consumer Relief Act, which will allow insurance companies to waive pre-insurance photo inspections for private passenger vehicles.
According to the Independent Insurance Agents & Brokers of America, Inc.’s New York chapter (Big I NY), these inspections have long been an unnecessary and undue burden on policyholders.
The new law will go into effect on May 15, 2024, and will be effective until October 1, 2027. Until then, the industry will continue operating under current New York state law, which requires “many customers to obtain a pre-insurance photo inspection to get comprehensive and collision auto insurance coverage, even when their insurance carrier does not believe it is necessary to prevent insurance fraud,” according to Big I NY. If a policyholder fails to complete the photo inspection process within 14 days, the collision and comprehensive coverages are terminated.
Ted Walsh, Big I NY board chairman and president of Walsh Duffield, noted the law’s signed marked a big day for New York policyholders and independent insurance agents alike.
“For too long, the car insurance photo inspection mandate has been a burden and an inconvenience for hard-working New Yorkers. Modern solutions for combatting fraud have made the regulation unnecessary and obsolete,” Walsh said in a release.
The purpose of pre-insurance inspections, which take around 15 minutes and are free, is to prevent fraud and reduce the cost of full-coverage auto by accurately documenting a vehicle’s condition.
Other states that require pre-insurance inspections are Florida, Massachusetts, New Jersey and Rhode Island, according to The Zebra, which noted each state has different inspection requirements.
