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OAI: NY Auto Insurance Reform Bill Could Lead to Lower Prices
New legislation introduced to the New York Senate includes comprehensive changes to the state's car insurance system.
RANCHO CUCAMONGA, CA, February 23, 2011 /Automotive PR News/ -- Heavy abuse of the New York no-fault car insurance system has been a fact of life in the state for a number of years, as have high premium prices that are associated with frequent, large claims payouts. But state Senator James Seward, chairman of the senate insurance committee, has recently introduced legislation that seeks to remedy some areas of state law that have left the system vulnerable to abuse.
New York has consistently been ranked as one of the states with the highest average expenditure on coverage, and many officials and experts have at least partly attributed the scarcity of low cost car insurance in the state to flaws in standard practices.
One of the laws that Seward intends to change is the 30-day threshold for insurers to pay out on claims. Currently, a coverage provider must pay accumulated interest on claims if they remain unpaid for 30 days, and any claim that goes past the time limit unpaid cannot be denied by the insurer, regardless of whether there appeared to be any abuse involved. The new bill intends to keep the interest aspect of this process, but allows insurers more options for recourse in the event that they do not pay out within 30 days of the filing.
Another target of the legislation is cost inflation, which has been reported to be a problem in a number of no-fault states around the country. According to the authors of the bill and other insurer organizations, some health care providers in the state are providing unnecessary treatments to individuals involved in car accidents. The Insurance Research Council has reported that at least 14 percent of New York City no-fault claims closed in 2010 appeared to show evidence of "either overbilling or excessive utilization of medical services."
To combat this problem, the bill would set standards for billing and require medical care providers to submit information showing that the services rendered were medically necessary.
Source: http://open.nysenate.gov/legislation/bill/S2816-2011
To learn more about coverage issues and ways of keeping costs low even in expensive markets like New York, readers can go to http://www.onlineautoinsurance.com/low-cost/ where they will find informative resource pages and a quote-comparison generator that can help consumers track down the lowest rates for a policy.
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