Oct 6, 2014

PIANY leads fight to update photo inspection regulations

PIANY continues to work with the New York State Department of Financial Services on a proposed update to current regulations that govern automobile photo inspections in an effort to make it easier for agents and policyholders to comply. Historically, PIANY has advocated for the elimination of this requirement; however, enacting these proposed changes will benefit consumers and agents. PIANY successfully sought to have the regulation amended and will push for its adoption. The DFS proposes to make the following changes:

         to clarify the types of vehicles subject to the inspection requirement and establishes definitions for a new, unused automobile, durable medium and new automobile dealer;

         to reduce the minimum time frame from four years to two years for an insured to be eligible for an inspection waiver for an additional and/or replacement automobile when the insured has been continuously insured for automobile insurance, with the same insurer or another insurer under common control or ownership;

         to allow an inspection waiver when an insured under a new policy had the automobile continuously insured for physical damage coverage by a pervious insurer that inspected the automobile within the prior two years of ownership;

         to increase the inspection deferral period from five to 10 calendar days;

         to recognize the use of new technology (e.g., digital photography, electronic storage and retrieval of inspection reports and photograph and use of email)

         to expand the current renewal inspection notice requirement from 33 days prior to renewal date to at least 45 days, but no more than 60 calendar days prior to the annual policy renewal date in order to track with Insurance Law section 3425; and

         to reduce the paperwork requirements on an insurer by permitting an insurer to utilize separate entities such as CARCO Group Inc., to maintain a central repository of its physical damage inspections reports.

PIANY also has engaged carrier and other producer groups to coordinate the effort to have this regulation adopted.

Some of the changes PIANY will propose to the DFS that are not contained in the original proposal include:

         adding an optional waiver to the inspection requirement when the vehicle is at least 5 years old rather than 7 years old, as the current rule provides;

         eliminating the rule that requires inspection reports to be used to settle physical damage claims;

         allowing insurance carriers an additional optional waiver when photographs were not taken and an accident resulting in physical damage occurs in instances in which there is no suspicion of fraud on the part of the policyholder; and

         extending the current five-day inspection deferral period to 14 days (as opposed to 10)