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New York State NY S764 Auto Insurance Bill

In the state of New York, state legislators are working on an auto insurance bill to authorize insurers to grant discounts to drivers who install retrofitted daytime running lamps on their vehicles. The bill requires the insurance commissioner to set qualifications and standards for the installation of such lamps. NY S764 is the Senate version of the bill, which passed the New York Senate on February 1, 2010. The bill is still in the New York Assembly.

Basics of NY S764

The S764 auto insurance bill, and its Assembly counterpart A317 [2], have both been in existence in some form since at least January 2009. Both have been brought up and died multiple times before the Senate brought S764 to a vote on Feb. 1 2010, when it passes the Senate. The bill is designed to motivate drivers in the state to install daytime running lamps on their vehicles to promote safety. It is specifically worded to only include non commercial private passenger vehicles [1].

S764 amends New York Insurance Law section 2336(g). According to statistics in use by the Senate, the use of daytime running lamps has reduced multiple vehicle accidents by 23 percent in Sweden, 40 percent in Norway and 37 percent in Sweden [1]. It encourages owners of private passenger vehicles who do not already have them to install daytime running lamps on their vehicles. The reason behind this action is to try to reduce the loss of life and property damage on New York roads. It would become effective on the first day of January in the year following the date on which it became law.

NY Accidents Always a Concern

Traffic in New York is extremely congested, especially in the New York City metropolitan area. Accident rates are extremely high due to the vast numbers of vehicles driving in and through the city. As a general rule, whenever traffic increases, so too does the rate of accidents. As a driver, the more cars and drivers you encounter, the more chances you have for an accident. Therefore in New York accidents are always a concern. The accident rates impact the costs of property damages borne both by the state and by drivers. They also increase the prices New York drivers have to pay for their auto insurance protection. One possible indirect consequence of possible passage of this law might be eventual lower accident rates during the day, and thus lower insurance costs.

Daytime accidents are more prominent in major urban areas like New York City than they are anywhere else. Some medium sized cities see high rates of accidents during morning and afternoon rush hours, when drivers are most likely to be heading to and from work and the roads are most congested. But in New York, there are really no light traffic times. There are many cars on the roads at all times, both night and day. On top of cars, there are also pedestrians everywhere all the time in the city and pedestrians are involved in more accidents in NYC than they are almost anywhere else. Clearly, the city's roads are a particularly dangerous environment conducive to frequent accidents. The hope of the state legislation is to do something to try to reduce the rate of accidents by making cars more visible.

Daytime running lamps operate differently than ordinary, old fashioned headlights on passenger vehicles. They are designed to run and be visible during the day. Rather than allow the driver of the car to see ahead of them, they are made for other cars and pedestrians to see the car. The bulbs are different, made for daytime visibility. This is evident in cars factory equipped with daytime running lights. At some point near dusk, the lights switch over to night time low beam headlight. Daytime running lamps have been credited with making roads safer to drive upon and for saving both lives and insurance costs, and the idea in the New York legislature is to try to maximize these savings by encouraging those cars that have no factory installed daytime running lamps to get them.

NY S764's Insurance Impact

In most cases, auto insurers include specific exclusions on their policies for coverage on aftermarket parts. For a covered policy holder to have coverage on a part like that, they usually have to add a special endorsement at significant additional cost. What's more, safety features usually have to be of the factory installed variety to qualify for auto insurance discounts. The reason for this is simple: it saves insurers and states from having to expend significant resources verifying the actual and correct installment of these features, such as anti lock brakes. Limiting the discounts to factory installed parts greatly eases administrative burdens. One of the pertinent questions that remain to be answered is how the insurance commissioner would choose to administer this program if it is passed into law.

The passage of S764 after more than a year in the New York Senate demonstrates that state legislators are warming to the idea of this type of legal change. It indicates that after much extensive debating, they are comfortable with the wisdom of the idea and of the realistic ability of the commissioner to administer such a program. Still, the specific details of such a program are not included in the tenets of either S764 or A317 (which at this point are essentially copies of one another), meaning it may be tough to predict how the program is administered and what its real effect may be if it does pass into law and enter into the books for New York drivers.

Giving private passenger vehicle owners in the state of New York an opportunity to earn a discount or reduction on their auto insurance premiums for doing something to enhance the safety of their vehicles seems to be a no lose proposition for drivers. If an auto owner can go through the effort of getting these lamps installed with the confidence that the work is done right and they will function without impeding the ordinary operation of the existing lighting, this option presents a great opportunity indeed. Several questions do remain, all of which naturally would have to be addressed were this bill ever to become law.

The administration of the program, including the rules regarding the lamps themselves as far as their design and their installation, is a big question mark going forward, but it is clear from their legislative action that the New York state Senate feels confident that this question can be resolved without much problem. The potential participation from insurers is another question. The wording of S764 does not call for mandatory reduction in premiums, only the allowance of such reductions. If many drivers were to spend the time and money to get these lamps and they did not see any savings on their policies, the law would be deemed a failure. But all these questions are only hypothetical at this point; one surmises just these sorts of concerns have been worked through by state lawmakers during the extended debate process. Presumably all of this will work out and consumers will be able to get a discount on car insurance policies.

[1] http://open.nysenate.gov/openleg/api/1.0/html/bill/S764 Retrieved 2010-02-21.
[2] http://open.nysenate.gov/openleg/bill/A317 Retrieved 2010-02-21.

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