In an unexpected turn, New York residents have found a novel charge appended to their automobile insurance bills. Tessa Fiscella’s recent encounter with this new development exemplifies the surprise that many have experienced.
Commencing on August 1st, a fresh New York law has come into force, compelling insurance companies to automatically include supplemental spousal liability insurance in the billing of every policyholder across the state. However, individuals have the option to decline this coverage in writing if they so choose. This legislative adjustment, ratified by Governor Kathy Hochul in December 2022, brings a notable shift to the insurance landscape.
The supplementary insurance, with its cost ranging between $20 and $84 per annum, offers coverage in cases where an individual sustains injury or fatality due to the negligence of their spouse in a motor vehicle accident. American Property Casualty Insurance Association’s Vice President, Kristina Baldwin, shed light on the financial implications of this change.
Evidently, the previous legal framework in New York merely necessitated insurers to present this coverage as an elective. However, the updated mandate enforces its inclusion unless expressly rejected by the policyholder.
Tessa Fiscella, a 33-year-old resident of Fairport, recounted her own experience, highlighting the perplexity triggered by this change. She did receive notification from Geico via email regarding the shift, albeit a day after the rule’s enforcement, and the message landed in her spam folder. Fiscella’s personal circumstances underscore a distinct issue – she is not married, prompting her to question the rationale behind this inclusion. She voiced her discontent, stating, “I was just annoyed… so why am I paying this?”
The crux of the matter lies in the distinction between beneficiaries. While married individuals stand to gain from the new policy, unmarried counterparts find themselves enveloped in this coverage with no commensurate benefit, a fact that has triggered debate within the insurance realm.
The American Property Casualty Insurance Association’s Vice President, Kristina Baldwin, expressed her perspective on this matter. She contended that the requirement for policyholders to formally decline this coverage through a separate written document is unwarranted. Baldwin underscored that the choice to procure insurance coverage should reside within the policyholder’s control.
Ellen Melchionni, the President of the New York Insurance Association, concurred with this sentiment, categorizing opt-out mechanisms as inherently non-consumer-friendly and predisposed to generating confusion.
Notably, the legislation comes with a sunset date of July 2027, allowing for a future reassessment of the directive. This evaluation will subsequently determine whether the change will be retained, revised, or repealed.
For those desiring to opt out of this supplementary coverage, a declination form is available on the official website of the New York Department of Financial Services. Fiscella attested to the straightforward and instantaneous nature of the process, having utilized her Geico app for the purpose. She also emphasized the importance of sharing this information, having informed her parents and her social media circle. In her words, “People do need to check this stuff. If you can save $7, it all adds up.”
