New York Governor George Pataki should veto two bills that would cause problems for consumers by expanding auto insurance liability for personal and rental vehicles, according to the National Association of Independent Insurers (NAII).
In a series of letters to Gov. Pataki’s office, the NAII expressed concern about A.B. 10456, which gives an insured spouse the ability to bring suit against the other spouse and collect under the liability provisions of their common insurance policy; and A.B. 7742-A, which would overturn current law by making consumers liable for rental car damages.
“These two bills would further contribute to disruption of New York’s already volatile personal auto insurance market,” Gerald L. Zimmerman, senior counsel for the NAII, said. “It’s in the best interest of New York consumers for the Governor to veto these bills without further consideration.”
A.B. 10456, the spousal liability bill, would “set up another road map for committing outright fraud,” Zimmerman noted. “Creating another avenue of fraud is especially problematic under the current market conditions in New York, where auto insurers are struggling under heavy loss costs due to rampant fraud in the no-fault system.”
The bill also includes cumbersome and significant administrative expense that would further add to the cost for both insurers and consumers, according to the NAII. A.B. 7742-A, the vehicle rental bill, would transfer the responsibility for rental car damage repairs from the rental companies to consumers – a move that would leave non-renting consumers with the burden of absorbing the additional insurance costs associated with the repairs, or from theft or vandalism, Zimmerman said.
“This bill benefits no one but the rental car companies, which will profit by selling expensive and unnecessary collision damage waivers (CDWs) to unwitting consumers who don’t realize they are already covered under their personal auto liability policy,” Zimmerman said.
“There is no precedent for this type of liability under New York law,” he added. “Theft and vandalism are risks that a vehicle owner should clearly bear, but should not apply to a rental vehicle.”