New York Raises Property Damage Threshold for Insurance Surcharges

Good news for New York drivers: They can now damage their cars a little bit more before an insurer can surcharge their policies, thanks to a law change signed this weekend by Governor David Paterson.

The law raises to $2,000 the threshold for property damage that must be reached before an insurer can surcharge a driver. Since 1991, that threshold has been $1,000.

The bill drew praise from the Professional Insurance Agents of New York (PIANY). “Policyholders in New York… have endured excessive and unreasonable expenses after minor automobile accidents far too long,” said PIANY President Kevin M. Ryan. “The threshold, which has not been raised in nearly 20 years, has saddled drivers with surcharges on almost every car accident, even minor fender-benders, since they are almost always likely to cost more than $1,000 to repair damages.”

In other insurance-related changes, Gov. Paterson signed into law legislation that ensures health care providers are compensated for their services in treating drivers who are injured while driving drunk. The law, which takes effect in six months, also allows insurers a right of recovery when the injured person is found guilty of operating a motor vehicle while under the influence of alcohol or drugs.