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NY Ins Rule-No Referral to DRP Unless Requested by Insured-1-24-2007

LEXSTAT N.Y. INS. LAW 2610

NEW YORK CONSOLIDATED LAW SERVICE

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*** THIS SECTION IS CURRENT THROUGH CH. 1, 01/24/2007 ***

INSURANCE LAW

ARTICLE 26. UNFAIR CLAIM SETTLEMENT PRACTICES; OTHER MISCONDUCT; DISCRIMINATION

GO TO CODE ARCHIVE DIRECTORY FOR THIS JURISDICTION

NY CLS Ins § 2610 (2007)

§ 2610. Collision or comprehensive coverage on motor vehicles; claims; repairs

(a) Whenever a motor vehicle collision or comprehensive loss shall have been suffered by an insured, no insurer providing collision or comprehensive coverage therefor shall require that repairs be made to such vehicle in a particular place or shop or by a particular concern.

(b) In processing any such claim (other than a claim solely involving window glass), the insurer shall not, unless expressly requested by the insured, recommend or suggest repairs be made to such vehicle in a particular place or shop or by a particular concern.

HISTORY: Add, L 1984, ch 367, eff Sept 1, 1984.

NOTES:

This section formerly appeared as Ins § 167-C which was added by L 1973, ch 909; amd, L 1974, chs 178, 743; L 1983, ch 565.

Research References & Practice Aids:

70 NY Jur 2d, Insurance § 1639

7 Am Jur 2d, Automobile Insurance §§ 154, 176

Couch on Insurance 2d:

21B Appleman, Insurance Law and Practice, Proof and Adjustment of Loss-Waiver § 12713

Texts:

New York Insurance Law (Matthew Bender's New York Practice Series) §§ 1.01, 1.08[1], 14.06[2b3], 35.04[5]

Case Notes:

The literal language of section 2610(b) restricts when an insurance company can make recommendations or suggestions that repairs be performed at a particular shop; The statute does not regulate speech on subjects other than recommendations or suggestions about particular shops, nor does the statute regulate the content or placement of material promoting an insurance company's repair program, nor does the statute regulate discussion or distribution of its text. Allstate Ins. Co. v Serio (2002) 98 NY2d 198, 746 NYS2d 416, 774 NE2d 180, remanded (2002, CA2 NY) 293 F3d 95.

An action to invalidate the "right of election clause" contained in automobile insurance policies as violative of Ins Law former § 167-c [now § 2610] was maintainable as an action for declaratory judgment; and defendants' motion for summary judgment in such action was properly denied where plaintiffs submitted exhibits in opposition which included examples of insurance contracts containing the "right of election" clause and complaints by policyholders and auto bodyshop owners as to the "steering practices" of various insurers. Auto Body Federation of Empire State, Inc. v Lewis (1981, 2d Dept) 80 AD2d 593, 436 NYS2d 32.

Plaintiffs were entitled to recover difference between amount paid to repair insured vehicle and amount received from defendant insurer, less deductible, where they met their burden of proving that repairs were necessary and damages claimed were reasonable and fair; neither CLS Ins § 2610 nor applicable regulations (11 NYCRR §§ 216.7(b)(14) and 216.12) obligated plaintiffs to use shop recommended by insurer, and no such obligation, in contravention of statute, was implied or created by their acceptance of insurance proceeds in amount of insurer's estimate of repairs. Rizzo v Merchs. & Businessmen's Mut. Ins. Co. (2001, Sup App T) 188 Misc 2d 180, 727 NYS2d 250.

Automobile insurer may recommend that its insureds bring their vehicles to specified facility for glass damage repair after accident has occurred, and if insured elects to have glass damage repaired by facility other than facility recommended by insurer, insurer is not financially responsible for any excess over cost that recommended facility would have charged had it performed glass damage repair. Insurance Department, Opinions of General Counsel, Opinion Number 02-03-05.

New York Insurance Law and Regulations promulgated thereunder do not prevent insurance agent from recommending auto body shop to insured that is different than any of those on insurer's specified list of auto body shops provided to insurance agent. Insurance Department, Opinions of General Counsel, Opinion Number 03-03-01.

When automobile manufacturer requires that repairs for physical damage to one of manufacturer's purchased autos be made at certified repair shops designated by manufacturer, automobile's insurer may not advise vehicle owner that they bring auto to one of certified repair shops for repair without being asked for recommendation, since such advice is prohibited under CLS Ins § 2610(b); however, insurer may voluntarily advise owner that automobile manufacturer does have certified repair shop requirement and suggest that owner may wish to contact manufacturer for further information. Insurance Department, Opinions of General Counsel, Opinion Number 04-06-03.