Warning: If you're located outside of New York State, feel free to skip this post. If you write personal auto insurance in New York, you're going to want to watch.
New York Insurance Law requires insurance companies to inspect many types of vehicles that they intend to insure for physical damage. Last winter, the New York State Department of Financial Services announced final adoption of a series of changes to New York Insurance Regulation 79, which sets for the rules insurers have to follow. A few of these changes will make life easier for insurance agents and their clients.
Clicking on the image below will take you to a 12-minute video in which I review the changes that most directly affect agents and their clients. The video and a link to the complete text of Regulation 79 are permanently housed on the Auto Insurance page in the Member Answer Center of the IIABNY Web site.
Last year, I developed and taught a continuing education course titled Absolute Liability: New York’s Scaffold Law and the Courts. The course looked at the history and interpretation of New York Labor Law Sections 240(1) and 240(6). Collectively, these sections are known as the “scaffold law.”
For those who are not familiar, the sections require project owners, contractors and their agents to provide certain devices to workers engaged in certain activities. The devices must provide “proper protection” to the workers. Courts have held that these entities cannot delegate the legal responsibility for this duty to anyone else. An injured worker automatically wins a lawsuit against them if he can prove that a violation of either of these sections at least partially caused his injury. Since it first enacted these provisions in 1885, the New York State Legislature has prohibited defendants from raising assumption of risk (you knew what you were getting into) and comparative negligence (I was at fault but you were more at fault) as defenses in court. In 1945, the New York State Court of Appeals (the state’s highest court) ruled that defendants may not raise the worker’s contributory negligence as a defense.
Basically, if the defendant cannot prove that the only cause of a worker’s injury was his own conduct, the only remaining question is how many zeros will be printed on the award check.
Part of my course looked at cases where the injured worker lost. One case I cited was Barreto v. Metropolitan Transit Authority. The plaintiff was an asbestos removal worker who exited a manhole on a Manhattan street at 4:00 a.m on a January morning. His foreman had instructed him, in these situations, not to start dismantling the enclosure that kept the public away until the cover was put over the manhole. He had followed these instructions several times before. This time, he started dismantling before the cover was replaced. In so doing, he stepped into the uncovered manhole and fell 10 feet. He sued multiple parties under the scaffold law to recover damages for his injuries. He lost at the trial court level, appealed to the appellate division, lost again, and appealed to the Court of Appeals.
The appellate division’s opinion was direct. “Here, plaintiff was provided with the perfect safety device, namely, the manhole cover, which was nearby and readily available…Having just emerged from it, plaintiff should have known that the manhole was still open, and covering it at that time would have avoided the accident…Plaintiff's claim that the statute required defendants to furnish a guardrail around the manhole, or safety netting or a harness, is not applicable here where the manhole cover was the adequate device for protecting the workers. There is no reason that other devices were necessary after the workers exited the manhole or that the manhole cover was inadequate.”
In class, I read these sentences aloud for comic effect, to show that judges sometimes get sarcastic. Yesterday, the plaintiff got the last laugh. A divided Court of Appeals ruled in his favor.
Associate Judge Eugene F. Pigott, Jr. wrote for the majority. He noted that the project’s site safety consultant testified that there should have been a guard rail system around three sides of the open manhole during the enclosure’s dismantling. This, in the judge’s opinion, was proof that the defendants did not provide the plaintiff with an adequate safety device. He also said that the plaintiff could not have been the sole proximate cause of his injury. The manhole cover was so heavy that it took two men to lift it into place. The judge reasoned that one person cannot be responsible for his own injury if he needed help to prevent it. For these reasons, Judge Pigott, Chief Judge Jonathan Lippman, and Associate Judges Jenny Rivera and Eugene M. Fahey ruled in favor of the injured worker.
Associate Judge Leslie E. Stein, joined by Associate Judge Sheila Abdus-Salaam, disagreed in part. In her opinion, the court should not have ruled in favor of either side. Rather, because some facts were in dispute, she wrote that a jury should decide whether Mr. Barreto received proper protection. The open questions, as she saw them, were:
Did the absence of the site safety consultant at the scene, and his failure to ensure that the work crew immediately replaced the manhole cover, contribute to the accident?
Was the site safety consultant’s testimony about the need for a guard rail system credible?
Was the manhole cover an adequate safety device?
Were there lights shining on the site? There was conflicting testimony about this. Remember, this work was done overnight in January, so there was no sunlight.
In her view, these were questions for a jury to consider and answer.
Associate Judge Susan Phillips Read was having none of it. Her dissenting opinion cited the plaintiff’s own testimony as evidence that he knew that he was supposed to wait until the hole was covered before he began dismantling the enclosure. He offered no explanation for his safety lapse, further incriminating him in her eyes.
She also doubted the credibility of the safety consultant’s testimony. His opinion that a guard rail system should have been in place did not cite any federal or state safety regulations. Also, she wrote that requiring a guard rail system made no sense. Per the foreman’s instructions, the manhole cover was supposed to be in place before dismantling of the enclosure began. She also rejected the argument about the weight of the manhole cover. “(T)his is not a case where a supervisor instructed an employee to use safety equipment that was unavailable or somehow unusable for its intended purpose. Plaintiff was never told to replace the manhole cover by himself, and whether it took two or more of the (asbestos removal) workers in the five-person crew to replace the manhole cover is irrelevant.”
“(P)laintiff's foreman instructed him not to begin dismantling the enclosure until the manhole cover had been replaced,” Judge Read continued, “and plaintiff disregarded this basic safety direction, which was the sole proximate cause of his accident: obviously, he would not have fallen into the underground chamber through the manhole opening if he had waited for the manhole to be covered, as he conceded he knew he was supposed to do, and had done on previous occasions. … It is certainly poor public policy to treat employers that direct their workers how to accomplish a task safely and make adequate safety equipment available just the same as employers that make little or no effort in this regard.”
Lastly, she addressed the dispute over whether the lights were on. “(T)his disputed fact is beside the point. Dim or nonexistent lighting would, of course, lend greater credence to plaintiff's testimony that he did not notice whether any of his co-workers had replaced the manhole cover or that it was missing, even though the crew was a small one working together in close quarters. It does not, however, explain why plaintiff proceeded to disassemble the enclosure without receiving the ‘okay’ from his supervisor, which he testified that he had waited for in the past.”
The upshot is that the court voted 4 to 3 to award summary judgment to Mr. Barreto (“summary judgment” is a judgment based on the judge's conclusion that the litigation involves only a question of law, with no associated questions of fact.)
As one who spent a lot of time last year learning about and speaking about the scaffold law, here are my thoughts on the matter.
Number one, I suspect some readers will immediately react with grumbling about so-called “liberal judges.” I want to nip that in the bud. Judge Pigott is a Vietnam veteran, former Erie County Attorney, and a jurist with 18 years’ experience. His appointments to all three levels of the New York State court system were courtesy of Republican Gov. George Pataki. Chief Judge Lippman was nominated for various court positions by Gov. Pataki and Democratic Gov. David Paterson. Judge Fahey, who received nominations from Governors Pataki and Andrew Cuomo, was house counsel for Kemper Insurance Co. for eight years in the 1980’s and 90’s. Not exactly a radical bunch.
Number two, I am not an attorney. I’m merely someone with a deep interest in court decisions and the impacts they have on people’s lives. I have a CPCU designation of which I am very proud, but let no one mistake that for the expertise of a practicing lawyer.
Number three, I hate this ruling. I’m sorry Mr. Barreto got hurt. The court opinions didn’t describe his injuries, but cases involving sprained ankles don’t go to the Court of Appeals. His injuries must have been severe. Regardless, the fault for his accident lies with his crew members and him. The manhole cover was right there. Manhole covers keep millions of pedestrians from falling into holes every day. That’s a pretty good track record of accident prevention. Further, he knew the cover was supposed to go on before dismantling work began. He wasn’t new to the job; he had seen the cover go on first many times before. It was standard procedure. This time, someone forgot and he paid the price for it. No one should celebrate that outcome. However, it doesn’t necessarily follow that third parties should be held responsible.
While researching the Absolute Liability course, I read about many injured workers who did what they were supposed to and still got hurt. Isidore Koenig was ordered to climb a ladder he thought was unsafe. Richard Hoffman wore a harness and used the scissor lift his employer gave him and still fell 35 feet to a lobby floor. Paul Wicks attached his ladder to a pole in the middle of an island at a gas station so he wouldn’t fall over; he fell anyway when the pole collapsed. Sharif Mohamed suffered horrible injuries when a backhoe bucket crushed him in an excavated trench after a co-worker bumped the backhoe’s controls. Sean Dowdell lost a leg because no one secured a piece of plywood that he stepped on while guiding a crane operator from 20 feet above ground.
The legislature enacted the scaffold law to protect people like this. In my opinion, using it to compensate someone who was obviously careless is bad public policy. It rewards carelessness, punishes those who could not prevent the carelessness, sticks taxpayers with the bill (three of the four defendants in the Barreto case were public entities,) causes liability insurance rates for contractors to rise, and further hurts the state’s business climate. Mr. Barreto will get some compensation to help him cope with the consequences of his accident. I certainly wish him well, but I disagree with the conclusion that the law compels the City of New York, the Metropolitan Transportation Authority, and the New York City Transit Authority to pay him that compensation. In my mind, it’s not justice.
This decision will go down as an unfortunate precedent in the unfolding history of the scaffold law. Plaintiffs’ attorneys will cite it in their arguments in future cases, and judges will have to consider it. I only hope that, when they do so, they will also consider the points Judge Read raised in her dissent.
I also hope that contractors will be extra vigilant when they spot their workers who don’t follow instructions. This attention may prevent more serious injuries, more crippled workers, and more large legal settlements. That would be the best outcome of all.
You may recall in my blog post yesterday that I mentioned that Big "I" Virtual University's Bill Wilson is on a mission from God to show that insurance is not a commodity. Here he is, in his own words as quoted last month by Insurance Journal:
Bill Wilson, director of the Virtual University of the Independent Insurance Agents & Brokers of America (IIABA), a well-known insurance industry expert and teacher for more than 30 years, says Google Compare is nothing more than another auto insurance comparison website that misleads consumers.
“What Google is doing has been done for at least 10 and maybe closer to 20 years now,” says Wilson. “There are all kinds of comparative rating websites. … from the usual Progressive Direct, GEICO, Esurance, Nerd Wallet, Quote Wizard, Bank Rate, carinsurancecomparison.com, and on and on.”
According to Wilson, Google isn’t any different from other comparative rating sites, except that it’s Google. The difference is in the Google name, expertise and financial prowess that come with it. “You have that Google name and their expertise and, needless to say, the potentially billions of dollars that they have available to pump into this.”
Because what they are offering now isn’t anything new, most independent agents aren’t overly concerned about Google’s entry into auto insurance, in Wilson’s view. Consumers are the most at-risk, he says.
“Most of the marketing for these kinds of websites is based allegedly on low-cost and convenience,” Wilson said. Many online comparison sites claim to offer an insurance quote in minutes. “How can you really help a consumer identify their exposures to loss and match it with the right customized product for those exposures” in minutes? he asks.
The big loser when it comes to online comparison tools like Google Compare is not going to be independent agents or even insurers; the real loser is consumers, he says. “Consumers are being duped into believing that all of these policies and the service providers are exactly the same. The only difference is price.”
Stay tuned. There will be more.
Photo by Simon Cunningham. Used under a Creative Commons Attribution 2.0 license.
I often get questions similar to one I received from an IIABNY member last week. "Does a Homeowners policy cover you,” the member asked, “if you host a party or rent a hall for a wedding reception?"
The person asked if a Homeowners policy covers a party. This implies that all Homeowners policies are the same. A Homeowners policy covers a certain exposure. They must all cover it, right?
Bill Wilson of Big "I" Virtual University is currently waging a war. He’s fighting the unfortunate and inaccurate notion that insurance is a commodity. This is an effort that I whole-heartedly support. Insurance policies are not all the same. If we insurance professionals don’t understand this, the public won’t either.
This is the first in what I hope will be a series of posts on this topic. Today's exhibit comes to us courtesy of an anonymous insurer. Its name is secret to protect its guilt. Our specimen is the insurer's commercial auto insurance policy.
First, though, I’ll give a quick refresher on the ISO Business Auto Policy, CA 00 01 10 13. The ISO form has five loss conditions:
- Appraisal for Physical Damage Coverage
- Duties in the Event of Accident, Claim, Suit, or Loss
- Legal Action Against Insurer
- Loss Payment Options - Physical Damage
- Transfer of Rights of Recovery
It also has eight general conditions:
- Concealment, Misrepresentation, or Fraud
- No Benefit to Bailee - Physical Damage Coverages
- Other Insurance
- Premium Audit
- Policy Period and Coverage Territory
- Two or More Coverage Forms Issued by Insurer
Now let's examine our anonymous insurer's form. It has all of these conditions, though the names differ somewhat. However, it also contains this additional condition:
This policy, its applications, all endorsements, and the Declarations include all the agreements between you and us relating to this insurance. It is the responsibility of the insured to notify us of any changes to drivers and vehicles. No change or waiver may be effected in this policy except by endorsement issued by us. If a premium adjustment is necessary, we will make the adjustment as of the effective date of the change. All endorsements to this policy are subject to these General Provisions unless otherwise modified in the endorsement.
According to this provision, the application is part of the legal agreement between insurer and insured.
The third paragraph of the Applicant's Statement on the application (there are eight paragraphs) states in part, "I understand I have a continuing duty to notify the Company of any changes in: ... (3) the operators of any of the vehicles listed on the policy ..." The insured has a "duty" to notify the insurer of new drivers, and the statement creating this duty is part of the agreements between the insurer and insured.
Call me crazy, but it sounds to me like the insurer could deny coverage if a driver they don't know about gets into an accident.
So, under the ISO policy, if I hire someone this week and don't think to tell my insurance agent, and the new employee totals the new F150, I have coverage. Under the anonymous insurer's policy, I don't.
There are real differences in the marketplace, folks. If you're selling commercial auto insurance, you have to know about them. Otherwise, you cannot properly inform your clients. Don't ask if a policy covers something; ask if this policy covers it.
Insurance isn't a commodity. Don't treat it as if it is.
More to come, I'm sure.
Every couple of years, the Independent Insurance Agents & Brokers of America (a/k/a, “The Big I”) conducts an “agency universe study.” The study gets into very specific detail about the state of independent insurance agencies across the country. It’s a way of taking the temperature of the distribution channel. It also indicates trends. For example, for many years the number of independent agencies shrank due to retirements, consolidations, mergers, and so forth. However, the number appears to have stabilized, according to the last few studies.
IIABNY decided it wanted to dig deep into the 2014 AUS to find out specifically what’s going on here in New York. The association hired a research consulting firm to pull out the New York data and compare it to the data from outside the state. The results were interesting – encouraging in some ways, challenging in others.
Most New York agencies saw their revenue climb from 2012 to 2013 – 67 percent. This compares to 70 percent of non-New York agencies. Like the rest of the country, New York has been slowly crawling out of the hole dug by the Great Recession. Upstate New York often seems to be in a permanent state of slow growth. Regardless, the majority of agencies are growing their businesses.
New York agencies have been around for a long time. The study looked at dates when agencies were formed. One-third of New York agencies started between 1940 and 1970. One-fifth of them were formed before 1940. That means 21 percent of New York insurance agencies are older than McDonald’s, Intel, Visa, rock music, the Peanuts comic strip, 14 Major League Baseball teams, and the last three U.S. presidents. When you consider that something like half of all businesses fail in their first five years, you have to tip your hat to that kind of staying power.
New York agencies do a big chunk of their business with New York based insurance carriers. Compared with their peers elsewhere, smaller proportions of New York agencies represent the large national carriers like The Hartford, Travelers, Progressive and Zurich. They make up the difference with New York names like NYCM, Merchants, Dryden Mutual and Utica National.
On the downside, not only are the agencies older, but so are the people running them. Almost 70 percent of agency principals are above the age of 50. That’s fine until those folks decide to hang up their spikes. Perpetuation will be an ongoing issue for New York agencies as they struggle to get people in their 20’s and 30’s into the insurance field.
On a related note, more of them report concerns about maintaining experienced producers and staff than do agencies outside the state. 40 percent find maintaining experienced producers extremely challenging (versus 21 percent in the rest of the country,) and 32 percent find maintaining experienced non-producer staff extremely challenging (15 percent elsewhere.) Industry demographics, which point to an older workforce, don’t indicate that these worries will alleviate anytime soon. Part of the reason for that may be …
They’re also not exactly training their marketing power on the younger set. Only 16 percent of New York agencies are focusing on individuals aged 39 to 49, and a slight 12 percent are going after those aged 21 to 38. Nationally, 29 percent of agencies are targeting 39 to 49 year-olds and 23 percent are targeting people in their 20’s and 30’s. Given that those are the age groups where tomorrow’s money will be, it would seem prudent for agencies to adjust their focus.
So, the report is a mixed bag, but there is no doubt that a lot of agencies have found and are finding New York a profitable place to be. I’ll be curious to see what the report two years from now will show. Will revenue keep growing, or will it plateau? What will agencies do about recruiting younger workers and selling to the electronically connected generation? The answers will say much about the insurance industry and the economy as a whole in the Empire State.
What are your thoughts on the study? Leave your two cents in the comments.
Question from an IIABNY member: I have an auto policy that shows Symbol 7 ("Specifically Described Autos") for Personal Injury Protection Coverage and Symbol 5 ("Owned Autos Subject to No-Fault") for Additional PIP Coverage. The insured has vehicles that are leased. Does the word "owned," as used in Symbol 5, include leased vehicles?
Answer: In my opinion, symbol 5 in the ISO Business Auto Policy (CA 00 01 10 13) does not apply to leased autos. I say this for the following reasons:
The policy describes symbol 5 as, “Only those ‘autos’ you own that are required to have no-fault benefits in the state where they are licensed or principally garaged. This includes those ‘autos’ you acquire ownership of after the policy begins provided they are required to have no-fault benefits in the state where they are licensed or principally garaged.”
The policy describes symbol 8 as, “Only those ‘autos’ you lease, hire, rent or borrow…”
The New York Mandatory Personal Injury Protection Endorsement (CA 22 32 11 13) defines “insured motor vehicle” as “a motor vehicle owned by the named insured and to which the bodily injury liability insurance of this policy applies and for which a specific premium is charged.”
The Additional Personal Injury Protection (New York) endorsement (CA 22 33 11 13) states, “The Company agrees with the named insured, subject to all of the provisions, exclusions and conditions of the New York Mandatory Personal Injury Protection Endorsement, not expressly modified in this endorsement as follows …”
Symbols 5 and 8 appear to be mutually exclusive – one includes only owned vehicles, the other includes only leased vehicles. The mandatory PIP endorsement includes only owned vehicles in the definition of “insured motor vehicle.” The APIP endorsement includes all the terms of the mandatory endorsement unless the APIP endorsement specifically changes them.
That is not to say, though, that the APIP endorsement does not cover anyone while they’re in a leased vehicle. The endorsement states:
"The Company will pay additional first party benefits to reimburse for extended economic loss on account of personal injuries sustained by an eligible injured person and caused by an accident arising out of the use or operation of a motor vehicle or a motorcycle during the policy period.
Subject to the exclusions set forth below, an eligible injured person is:
(a) The named insured and any relative who sustains personal injury arising out of the use or operation of any motor vehicle …
(c) Any other person who sustains personal injury arising out of the use or operation of the insured motor vehicle while occupying the insured motor vehicle; or
(d) Any other person who sustains personal injury arising out of the use or operation of any other motor vehicle (other than a public or livery conveyance) while occupying such other motor vehicle, if such other motor vehicle is being operated by the named insured or any relative."
The endorsement contains eight exclusions. Four of them pertain to vehicles owned by the injured person and that do not carry no-fault coverage; one pertains to occupying a motorcycle; one pertains to intentional self-inflicted injuries; one pertains to operating a vehicle while intoxicated; and the other pertains to racing, illegal acts, and working in the auto service business. None of these necessarily apply to the named insured or relative while in a leased vehicle, or to another person while occupying a leased vehicle operated by the named insured or relative. The endorsement should provide coverage to the injured individuals. It also gives the insurer subrogation rights, so the insurer could conceivably seek recovery from the leasing company or its insurer.
NOTE FROM THE INSURANCE GEEK™: Today's post is courtesy of freelance writer Gemma Daly. I invited her to write a post about the unfortunate tendency of many of us in the insurance trade to lapse into industry jargon. While this language makes sense to us, to those outside the industry, it sounds like a slightly less understandable dialect of Swahili. The audience for Gemma's post is insurance consumers, but insurance professionals would do well to keep it in mind the next time we're having a conversation with someone who doesn't live and breathe this stuff. Gemma, take it away...
Since as far back as the 1970s, in many countries across the globe, there has been a strong campaign for the use of ‘plain English’ in legal documents, government forms and contracts. The law has been shrouded in obscure and antiquated terminology for many decades. Far from being a concern for lawyers and judges in exclusivity, misunderstood terminology has led to serious economic loss for countless persons who enter into legal relationships with others, or with a company. Complicated English is discriminatory because it requires a level of comprehension which is not necessarily shared by the vast majority of English speakers in the world.
A good example of terminology which needs explanation lies in the world of insurance. Many consumers freely admit that there are some clauses and terms they simply do not understand; they may ‘get the general gist’, but they are unaware of how particular terms and clauses would affect them in concrete situations. In this post, we take a few terms from just one sector of the insurance industry (car insurance.) We will explain their meaning in plain English so that consumers can hopefully make more informed choices when renewing their policies or contracting car insurance for the first time.
Collision coverage: When your vehicle rolls over or collides with another object, this coverage pays for damage to your vehicle. Collision coverage may extend to a vehicle you do not own or one you are renting, and certain exclusions may apply.
‘Comprehensive insurance’: In plain English, ‘comprehensive’ suggests ‘thorough’, yet if you find this term in your car insurance policy, you should know that its scope is actually far more limited. Comprehensive insurance involves all things other than damage caused by a crash. Therefore, damage caused to a third party’s vehicle, personal injury or damage to third party property, may not be covered. To make things even more confusing, a similar term, ‘all-risk coverage’, when found in a business insurance coverage, usually does cover most claims which are not specifically included by the policy. When shopping for insurance, read the small print and ask the insurer what is covered, and what is excluded.
Deductible: This is the amount you will be expected to pay out in the event of an accident, before the insurance company will step in to help. The higher your deductible, the lower your premium is likely to be.
Driver status:You can choose to add other drivers to your policy; they will be listed as having one of the following types of status:
Rated: They actively drive the vehicles included in the policy.
Excluded: They are not permitted to drive the vehicles included in the policy and will not be covered in the event of damage/injury. [NOTE: In some states, insurers cannot exclude coverage for drivers, other than possibly collision coverage. New York is one such state.]
Listed: Residents from the same household as the policy holder who do not drive the vehicles on the policy.
Full coverage: There is no such thing as ‘full’ coverage, though the appearance of the term indicates you are covered for more than just liability.
Personal Injury Protection (PIP) and Bodily Injury Liability Insurance (BI): These two terms sound confusingly alike, yet while BI only covers the medical expenses for any personal injury caused to someone else (not for any injury you have suffered), PIP does cover your own medical expenses and may also cover loss of wages and other damages. PIP is not available in all states yet it is obligatory in others. Some PIP plans offer loss of services (i.e. the insurance company can help you pay for grocery delivery fees, transport for your kids to school, etc.). PIP can also help your family cover funeral costs if the accident should be fatal.
Property damage liability coverage (PD): If you are responsible for an accident, this coverage pays for damage to the property of third parties as a result of the accident. It also generally covers legal costs you may incur if you are sued by the other party.
Uninsured motorist bodily injury coverage: The insurance company pays for any bodily injury you may suffer (and related medical expenses) if the responsible party (other than yourself) performs a ‘hit and run’ or is uninsured
Underinsured motorist bodily injury coverage: This type of coverage also covers any bodily injury you may suffer (and related medical expenses) if the person at fault does not have adequate car insurance.
Academia.edu, Simplifying Insurance Policies - Importance of Plain Language, accessed April, 2015.
Techinsurance.com, The TechInsurance Glossary of Insurance Terms & Jargon, accessed April, 2015.
Languageandlaw.org, The Plain English Movement, accessed April, 2015.
QZ, Business Public Liability Insurance, accessed April, 2015.
Blogs.findlaw.com, 5 Confusing Car Insurance Terms Explained, accessed April, 2015.
Nfly.info, Basic Things to Know when Shopping for Car Insurance, accessed April, 2015.
(April 1, 2015) — The Independent Insurance Agents & Brokers of New York today announced that it has reached an agreement in principle with insurance giant GEICO to offer customized auto insurance directly to consumers. The new program, tentatively titled the Custom Retro Automobile Program, will go online later this month. It will be the first time that IIABNY, New York’s oldest independent insurance producer trade organization, has offered insurance products directly to consumers.
“The success enjoyed by our competitors in the direct-to-consumer distribution channel has not escaped our notice,” observed IIABNY Chair of the Board James D. Sutton. “Clearly, there are opportunities in today’s marketplace. IIABNY would be remiss if it failed to pursue them.”
The program will be available on a new web site, www.nycarz.com. Consumers who prefer the do-it-yourself route will be able to select a bundle of auto insurance coverages that fits their budgets. To help them make informed decisions, IIABNY Assistant Vice-President of Research Tim Dodge will produce a series of videos to be posted on the association’s Instagram page. Instagram, a popular photo-sharing Web site, allows users to post videos up to 15 seconds in length.
“How long does it take to tell someone to pick the least expensive option?” Dodge noted. “15 seconds is plenty.”
IIABNY President and CEO Richard Poppa added, “We could not be more excited about this new venture with GEICO. It is a true privilege for IIABNY to partner with one of the biggest names in the insurance industry as we enter what is admittedly an unfamiliar marketplace for us.” He neither confirmed nor denied reports that GEICO’s popular television commercial character “The Gecko” will make an appearance at the launch event, scheduled to take place prior to the New York Yankees’ opening day game at Yankee Stadium.
Concluding his remarks, Poppa added, “Did you fall for this? Happy April Fools’ Day. Oh, and … gotcha.”
With input from IIABNY and other groups, the New York State Department of Motor Vehicles this week proposed regulations that would for the first time permit insurers to issue electronic insurance I.D. cards. The proposal appeared in the Feb. 25 issue of New York State Register.
The DMV said that it consulted with several interested groups while drafting the proposed regulations, including the state police; the New York State Association of Chiefs of Police; seven individual insurers; and the Property Casualty Insurers (PCI). PCI asked IIABNY for an assessment of potential negative impacts on insurance producers. IIABNY said that any effects on producers would be minimal, since producers do not issue permanent I.D. cards. The DMV also surveyed its peers in the 30 states that currently permit electronic I.D. cards to address concerns raised by the police chiefs.
Highlights of the proposed rules:
- Insurance companies that choose to will be permitted to issue electronic I.D. cards. However, they will be able to do so only with the consent of the person or entity named on the card.
- Electronic ID cards will be acceptable as proof of insurance in the same manner as paper ones
- The cards must be capable of being displayed on a device that would earn the driver a ticket if used while in motion, such as cell phones, PDA’s, tablets, laptops, game systems, and similar devices.
- They must meet the standards that apply to paper cards
- Insurers will be prohibited from issuing them for:
- Temporary I.D. cards – agents and brokers will probably not be able to issue them
- Self-insured entities
- Fleet transactions, where the vehicle description on the card is “ALL OWNED VEHICLES”
- Retail auto dealers, where the vehicle description on the card is either “DEALER GARAGE AUTO LIABILITY POLICY" or “ALL OWNED AND NON-OWNED VEHICLES-COMPHREHENSIVE AUTO LIABILITY POLICY"
- Wholesale auto dealers and transporters, where the vehicle description on the card is "AUTO LIABILITY POLICY"
The DMV is accepting comments from the public on the proposed regulations until April 11.
I read the insurance trade press every day, and if there's one story I read over and over again, it's that the U.S. insurance industry is on the verge of a cataclysmic brain drain. The workforce is getting older (I'm 53 years old, which makes me one of the younger members,) and a lot of people in the industry are seeing visions of retirement. A sizeable number of our colleagues will write their last accounts or adjust their last claims over the next several years. By most accounts, we are nowhere near ready for this.
That's why the work described in this three-minute report from a TV news show in upstate New York is so important. Many of you are probably familiar with the name "InVest," but you may not know how it works or how well it works. This is a good example of outstanding work done by one CEO of a small mutual insurer and some high school teachers.
Watch, and think about what you can do to make sure knowledgeable insurance professionals will be there to handle your claims ten years from now.