Relates to summaries of readable and understandable insurance policies which shall include the limits of insurance, the term of the policy, the amount of premium and the amount of deductibles and a statement.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A536A
SPONSOR: Paulin (MS) TITLE OF BILL:
An act to amend the insurance law, in relation to summaries of readable
and understandable insurance policies
PURPOSE OR GENERAL IDEA OF BILL:
To require insurers to provide policyholders with a summary document
summarizing coverage.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 adds a new section 3102 to the insurance law, requiring insur-
ers to provide, with every policy, an accompanying document containing
the limits of insurance; the term of the policy; the amount of premium
to be paid for the policy; the amount of any deductible or deductibles
applicable before the policy will provide coverage; the principal exclu-
sions from coverage under the policy; and a statement clarifying such
document is only a summary of the policy. The information may be
provided by an agent or broker authorized by an Insurer and may be sent
electronically.
Section 2 provides the effective date.
JUSTIFICATION:
Millions of New Yorkers buy auto, homeowners and renters insurance poli-
cies every year, but most have very limited understanding as to what
exactly their policies do and do not cover. It is not widely known, for
example, that standard homeowner policies will not cover flood damage
and auto insurance will not cover accidents occurring while someone is
operating their vehicle as an Uber or Lyft driver. Few consumers take
the time to read the terms and conditions of their policy, since they
are not presented in a clear and concise format, thereby discouraging
consumers from even attempting to read the details of their coverage.
This bill would require insurers to send policyholders a summary docu-
ment including the coverage limits, term of the policy, annual premium,
and the principal exclusions from coverage. It would also need to
include a disclaimer that the document is only a summary of the policy,
that the amount and scope of coverage are determined only by the actual
terms of the policy, and that if the policyholder has any questions they
should contact the insurer, or the agent or broker who sold the policy.
Providing a policy summary is a beneficial tool to ensure consumers are
informed and have a clearer understanding of their insurance coverage.
PRIOR LEGISLATIVE HISTORY:
A2741 of 2023 and 2024, passed assembly / Same as S4228 of 2023 and
2024, referred to insurance
A.9927a of 2022, referred to insurance.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect on the first of October next succeeding the
date on which it shall have become a law.
