Motor Vehicle Accidents Still Reportable at $1,000 -- Now Surchargable at $2,000

On July 30, 2010, Governor Paterson signed Bill S1700B as part of Chapter 277 of the Laws of 2010,  which raises the aggregate property damage premium surcharge threshold from $1,000 to $2,000 for New York auto policies issued, modified or renewed on and after November 27, 2010.  The new law amends New York Insurance Law § 2335 by adding a new subsection (a) to that statute, providing:

§ 2335 -- Motor vehicle liability insurance rates; prohibition of surcharges for certain traffic infractions

No insurer authorized to transact or transacting business in this state, or controlling or controlled by or under common control by or with an insurer authorized to transact or transacting business in this state, which sells a policy providing motor vehicle liability insurance coverage in this state shall increase the policy premium in connection with the insurance permitted or required by this chapter solely because the insured or any other person who customarily operates an automobile covered by the policy:

(a) has had an accident that does not result in aggregate damage to property in excess of two thousand dollars, provided that any policy surcharge shall be permissible for any accident which results in bodily injury or if the insured has more than one accident in the merit rating experience period.  Nothing in this subsection shall change the dollar amount of the accident reporting threshold of the Department of Motor Vehicles as provided for in paragraph one of subdivision (a) of section six hundred five of the Vehicle and Traffic Law.  (New language underlined.)

Note that premium surcharges are expressly permitted for accidents that result in bodily injury or if an insured has more than one accident during the merit rating experience period.  The reporting threshold of V&T § 605 was left unchanged at $1,000.

If the New York state legislature does not extend Insurance Law § 2335, it will sunset or expire on July 1, 2011.