17/V5
`CMQZDZB
`Cm/ab
`7[p'o’27%
`/ 771)]
`
`Exhibit 1006
`
`‘ 3335*
`E
`A
`
`NEW YORK STATE INSURANCE DEPARTMENT
`
`::#: I-(2.-’o
`
`
`
`1995
`
`CONSUMERS GUIDE
`
`ON
`
`AUTOMOBILE INSURANCE
`
`(DOWNSTATE)
`
`GEORGE E. PATAKI, Governor
`
`EDWARD J. MUHL, Superintendent
`
`Liberty Mutual
`Exhibit 1006
`
`Page 000001
`
`

`
`ATTENTION
`
`DEPARTMENT OF MOTOR VEHICLES (DMV) AND
`NEW YORK STATE PUBLIC LIBRARIES
`
`Under New York State Law, copies of this guide
`should be made available to all New York State
`
`public libraries and DMV oflice
`
`
`
`I-u—
`
`Page 000002
`
`

`
`
`
`NEW YORK STATE
`
`INSURANCE DEPARTIVIENT
`
`1995
`
`CONSUMERS GUIDE
`
`ON
`
`AUTOMOBILE INSURANCE
`
`GEORGE E. PATAKI
`
`GOVERNOR
`
`EDWARD J. MUHL
`
`SUPERINTENDENT OF INSURANCE
`
`Page 000003
`
`

`
`
`
`GEOFIGE E. PATAKI
`GOVERNOR
`
`
`
`STATE os New Yonx
`
`EXECUTIVE CHAMBER
`ALBANY 12224
`
`Dear Fellow New Yorkers:
`
`Trying to find the best automobile insurance company for your
`needs can be a difficult chore.
`The Insurance Department has
`prepared this annual Consumers Guide on Automobile Insurance to
`help you begin your search as an "educated consumer."
`The guide
`provides practical cost—saving tips, information about required and
`optional coverages, and advice about how to file a claim or make a
`complaint against an insurer.
`
`One of the most important things to remember is to comparison
`shop. There are over 100 insurers that write auto insurance in New
`York State.
`To give you a starting point, this booklet contains
`prices for 25 New York automobile insurance companies in addition
`to the Assigned Risk Plan.
`
`The Insurance Department continually works towards promoting
`free and fair competition among insurers to make the best auto
`insurance coverage readily available and generally affordable
`throughout the State.
`New York State has one of the largest auto
`insurance markets
`in the country.
`This guide will help our
`consumers be among the best informed.
`
`Please shop wisely and drive safely.
`
`Very truly yours,
`
`/9-r€‘.%:
`
` ‘
`
`{:3 printed on recycled paper
`
`Page000004
`
`

`
`STATE OF NEW YORK
`INSURANCE DEPARTMENT
`160 WEST BROADWAY
`NEW YORK, NEW YORK 10013
`
`
`
`Edward J. Muhl
`Superlntendent of Insurance
`
`Dear New Yorkers:
`
`Many people need sound advice when looking for the right automobile
`insurance company. The Insurance Department offers you some help in your
`search with its updated
`This guide,
`published each year, provides valuable information to help you find the best auto
`insurance protection for you and your family. The guide not only serves to
`inform consumers about laws, regulations, and policies governing auto insurance
`in New York State, but also provides practical tips and sample premiums for 25
`New York automobile insurance companies and the Assigned Ftisk Plan.
`
`As you read through this guidebook, keep in mind the most valuable
`advice is to comparison shop. Be aware of discounts that are available such as
`those for anti-theft devices. You'll find there have also been some recent
`changes to the auto insurance market. For example, there is now an optional
`no-fault managed care system which is explained further in this guide.
`
`This guide will help you become a bette‘r_,_a.nd
`insurance consumer.
`.
`re
`
`a
`
`Page 000005
`
`

`
`CONSUMERS GUIDE ON AUTOMOBILE INSURANCE
`
`~x1 ‘
`
`Page 000006
`
`

`
`NEW YORK STATE INSURANCE DEPARTMENT
`
`CONSUMERS GUIDE ON AUTOMOBILE INSURANCE
`
`IABL
`
`Page
`
`I.
`
`II.
`
`INTRODUCTION
`
`REQUIRED AUTO INSURANCE
`
`III.
`
`OPTIONAL AUTO INSURANCE
`
`IV.
`
`THE VOLUNTARY & RESIDUAL MARKETS
`
`V.
`
`THE ROLE OF AGENT, BROKER OR COMPANY REPRESENTATIVE
`
`VI. WHEN APPLYING FOR AUTO INSURANCE
`
`VII.
`
`IMPORTANCE OF HIGHWAY SAFETY 8: SAFE DRIVING
`
`VIII. HOW TO SAVE MONEY ON AUTO INSURANCE
`
`IX.
`
`RATING BASIS FOR PHYSICAL DAMAGE COVERAGES
`
`X.
`
`DIFFICULT-TO-INSURE VEHICLES
`
`XI.
`
`WHAT ABOUT TERMINATION?
`
`XII.
`
`IN THE EVENT OF A CLAIM
`
`XIII.
`
`IF YOU HAVE A COMPLAINT OR INQUIRY
`
`XIV. WHAT ABOUT FRAUD?
`
`XV.
`
`AUTO INSURANCE PRICES IN NEW YORK
`
`APPEEILIQES
`
`Appendix I - AUTO INSURANCE PRICE COMPARISONS & FOOTNOTES
`
`Appendix II - AUTO INSURANCE RATING TERRITORY DESCRIPTIONS
`
`Appendix III -TELEPHONE NUMBERS OF AUTO INSURERS
`
`1
`
`1
`
`6
`
`10
`
`11
`
`12
`
`15
`
`17
`
`19
`
`21
`
`23
`
`24
`
`27
`
`28
`
`28
`
`32
`
`50
`
`52
`
`Page 000007
`
`

`
`IMPQBTANT NQTI E
`
`The rates contained in the sample rates section of this Guide (Appendix I) are
`shown at the minimum limits of bodily injury and property damage liability and
`uninsured motorists coverages required by law as of the date of publication. These
`are:
`
`Bodily Injury Liability
`Uninsured Motorists
`Property Damage Liability
`
`$10,000 per person; $20,000 per accident
`$10,000 per person; $20,000 per accident
`$5,000 per accident
`
`However, please note that, as a result of recently enacted legislation, the minimum
`limits of liability coverage will be raised as follows effective January 1, 1996:
`
`Bodily Injury Liability
`Uninsured Motorists
`Property Damage Liability
`
`$25,000 per person; $50,000 per accident
`$25,000 per person; $50,000 per accident
`$10,000 per accident
`
`Please keep in mind that the purpose of presenting comparative data in these
`tables is to show relative pricing comparisons among insurers. Although that
`purpose has not been altered, it is important to note that the cost for the increased
`minimum limits of coverage after January 1, 1996 will be greater than those current
`minimum limits contained in these tables.
`
`‘ 1
`
`Page 000008
`
`

`
`I. INTRODUCTION
`
`In order to register your car and obtain license plates in New York you must either purchase an
`
`automobile liability insurance policy from an insurer
`
`licensed by the New York State insurance
`
`Department, or provide other acceptable proof of financial responsibility in at least the minimum amounts
`
`required by law. At your option. you may purchase higher amounts of these required coverages as well as
`
`other insurance coverages in order to meet your particular needs. This Guide is designed to give you a
`
`better understanding and practical tips about auto insurance.
`
`II. REQUIRED AUTO INSURANCE
`
`This section describes the minimum coverages and amounts of insurance that must be purchased
`
`to satisfy the financial responsibility requirements needed to register your car and obtain license plates.
`
`These coverages include:
`
`(1) No-Fault - to pay medical expenses and lost earnings for a driver or passenger
`
`injured in, or pedestrian injured by, your car;
`
`(2) Liability - to protect against the harm your car might do to other people and their
`
`property; and
`
`(3) Uninsured Motorists -
`
`to protect against
`
`the injuries you, your family or your
`
`passengers might suffer in a hit-and-run accident or in an accident with an uninsured
`vehicle.
`
`A.
`
`No-Fault Benefits—Personal Injury Protection (PIP)
`
`No-Fault, also called Personal
`
`Injury Protection (PIP),
`
`is
`
`designed to pay promptly—without regard to who might have been at
`
`fault or whether there was any negligence—for actual economic losses
`
`operation.
`
`(meaning medical expenses,
`
`lost earnings, and other reasonable and
`
`necessary expenses related to injuries sustained), up to $50,000 per
`person ("basic No-Fault coverage”), to a driver or passenger injured in
`your car and to pedestrians injured by your car, because of its use or
`
`' *3 ’
`
`Page 000009
`
`

`
`The purpose of No-Fault insurance is to restore individuals hurt in auto accidents to health and
`
`productivity as
`
`Because of New York’s No-Fault law, lawsuits due to auto accidents
`
`can be brought only for economic losses that exceed No-Fault benefits and—only if a “serious injury" (as
`
`defined in the insurance Law) is sustained—for non—economic damages (such as pain and suffering).
`
`No-Fault is a personal injury coverage and does not pay for auto body repair of your car or
`
`damage to any other party's motor vehicle or real or personal property. No-Fault is also primary to health
`
`insurance, meaning it pays first in the event injury is due to an auto accident.
`
`No-Fault coverage may be administered in two ways, either as "basic no-fau|t" or "no-fault
`
`managed care". The managed care option is a relatively new concept and may not be available from
`
`many insurers at this point.
`
`It is also not required that all insurers offer this option.
`
`1. Basic N9-F§_u|_t
`
`Under this coverage, your insurer pays you and relatives living with you for economic losses
`
`arising from injuries sustained in motor vehicle accidents anywhere within the United States, its territories
`
`and possessions, or Canada.
`
`It also covers any passengers injured in accidents in New York State while
`
`in your vehicle, as well as any guest passengers who are New York State residents injured in your vehicle
`
`anywhere in the United States, its territories and possessions, or Canada, if they are not covered under
`
`another auto insurance policy in New York State.
`
`Pedestrians injured by motor vehicles in the State are also protected by No-Fault.
`
`Basic No-Fault auto insurance coverage includes:
`
`o
`
`-
`
`u
`
`o
`
`necessary medical and rehabilitation expenses (in accordance with established fee
`
`schedules);
`
`80% of lost earnings from work, up to a maximum payment of $2,000 per month for
`
`up to three years;
`
`up to $25 a day, for up to a year,
`
`to reimburse other reasonable and necessary
`
`expenses resulting from the auto accident; and
`
`a $2,000 death benefit (in addition to the $50,000 basic No-Fault limit), payable to the
`
`estate of a person eligible for No-Fault benefits but killed in a motor vehicle accident.
`
`However, under the vast majority of insurers’ policies, a person will be ineligible for No-Fault
`
`benefits, if:
`
`0
`
`0
`
`0
`
`o
`
`driving while intoxicated or impaired by use of a drug that contributes to the accident;
`
`intentionally causing his or her own injuries;
`
`riding a motorcycle (as operator or passenger);
`
`injured while committing a felony;
`
`Page 000010
`
`

`
`0
`
`c
`
`injured while in a vehicle known to be stolen; or
`
`an owner of an uninsured vehicle.
`
`2. N -F
`
`I M n
`
`C Le
`
`This new option provides benefits identical
`
`to basic No-Fault, with the following significant
`
`differences pertaining to the health component of No-Fault coverage:
`
`-
`
`lf injured in an auto accident, the insured and all members of the insured's household
`
`agree to receive health services from participating providers in a managed care-
`network.
`
`o
`
`Health services provided outside the network, with the exceptions of emergency care
`
`or care that is not accessible or not within the scope of the managed care program,
`
`will be subject to a deductible of up to $2,500 per person and per accident and/or a
`
`25% co-insurance payment per treatment rendered.
`
`o
`
`If you have a dispute concerning the health services provided by your managed care
`
`providers, you must
`
`first attempt
`
`to resolve that dispute through procedures
`
`established by your managed care program.
`
`If the dispute is not resolved to your
`
`satisfaction, you then can seek No-Fault arbitration.
`
`0 Your No-Fault premium will be reduced if the managed care option is chosen in place
`
`of Basic No-Fault coverage.
`
`No-Fault managed care coverage is optional for both insurer and insured. You do not have to
`
`purchase No-Fault managed care coverage, but you must purchase either Basic No-Fault or No-Fault
`
`managed care coverage.
`
`If you select No-Fault managed care coverage, you can choose to return to
`
`Basic No-Fault coverage upon renewal. The choice to purchase No-Fault coverage on a managed care
`
`basis is entirely up to you. You should consult with your insurer, agent or broker to determine whether this
`
`managed care coverage is available from your insurer, and if so, to obtain the details of the program so
`
`that you may make an informed decision. And, again, please remember that the No-Fault managed care
`
`option only applies to the health component of this coverage. The Wage Loss, Other Necessary Expense
`
`and Death Benefit components of No-Fault coverage are the same regardless of the option selected.
`
`B.
`
`Liability Insurance—Bodily Injury & Property Damage
`
`This liability coverage protects you (and anyone driving your car with your permission), if a claim
`
`is made against you by another person ("third-party"), alleging that you were negligent or otherwise at
`
`Page 000011
`
`

`
`fault. Thus this coverage will make payments on your behalf to that injured third-party, in the event your
`car is involved in an accident that results in serious injury or death to others or damage to their property.
`
`In addition, your insurance company must provide you with a legal defense against such claims,
`
`without reducing your policy's liability limits.
`
`As of the date of this Guide’s publication, the minimum limits of third-party bodily injury liability
`coverage mandated by New York’s Vehicle and Traffic Law are:
`
`-
`
`0
`
`$10,000 for bodily injury (not resulting in death), or $50,000 for any injury resulting in
`
`death, sustained by any one person in any one accident;
`
`$20,000 for bodily injury (not resulting in death) sustained by two or more persons in
`
`any one accident, or $100,000 for any injuries resulting in death sustained by two or
`
`more persons in any one accident.
`
`Because the minimum limit of coverage required by law for property damage liability protection, for
`
`damage to another party's car or property, is $5,000 per accident, these minimum liability limits in New
`
`York are sometimes together referred to as "$10,000/$20,000/$5,000" or “1OI20/5”.
`
`Please be aware that, as mentioned in the “important Notice” at the front of this Guide,
`
`these mandatory minimum limits will increase, as of January 1, 1996, to $25,000 per person and
`$50,000 per accident for bodily injury liability coverages, and $10,000 per accident for property
`damage liability coverage.
`
`If you are injured in an auto accident, or your car is damaged, due to someone else's negligence,
`
`you may be able to make a claim against that other persons auto insurance policy for bodily injury and
`
`property damage liability. You have a right to sue another party involved in the auto accident for pain and
`
`suffering, only if you sustained a “serious injury" as defined in the insurance Law. You must establish that
`
`the other party was at fault. You can also go to court: against a third party for property damage and, when
`bodily injury has been sustained, for other economic loss not covered by, or exceeding the limits of, your
`No-Fault coverage.
`
`Suing another party would be your own personal action, and not involve your insurance company
`under the provisions of your policy.
`If you decide to sue someone else, your insurer under your own
`
`policy is not required to provide or pay for a lawyer you might want or need to handle your claim against
`another party.
`
`Page 000012
`
`

`
`C.
`
`Uninsured Motorists Coverage
`
`Another important feature of your auto insurance policy is bodily injury protection for you, your
`
`family members who live with you, and occupants of your car, in the event they are injured as the result of
`
`negligent actions by an uninsured vehicle or hit-and-run motorist. This mandatory coverage applies only
`
`in regard to bodily injury due to accidents occurring in New York State, and does not cover auto body
`
`damage to your car or damage to other property.
`
`For New York accidents, the amount of uninsured motorists protection required to be provided is
`
`the same minimum bodily injury limits as required for liability insurance. For a small charge, this uninsured
`
`motorists coverage can be extended to out-of-state accidents by endorsement, so you should check with
`
`your agent, broker or insurer if you want this extension of coverage.
`
`If anyone in your car happens to get injured by the driver of an uninsured vehicle or a hit-and-run
`
`motorist, a claim should be filed with yo_u_r auto insurance company under this coverage. Similarly, you
`
`should file a claim with @ insurer if you or a member of your family is injured in an uninsured vehicle, or
`
`injured as a pedestrian by an uninsured or hit-and-run motorist.
`
`If you do not own a car, but a relative in
`
`your household does, you may file a claim under that policy.
`
`If you think you're not covered by your own policy or by a family member’s policy in your
`
`household, and should you be injured as a pedestrian by an uninsured vehicle or hit-and-run driver or as
`
`an occupant of an uninsured vehicle in New York State, you may still be eligible for uninsured motorist
`
`protection, to the extent of basic No-Fault coverage and minimum limits for bodily injury liability. You or
`
`your representative should immediately report the accident to proper authorities, and then promptly
`
`(because there are stringent time limits) file a claim with the Motor Vehicle Accident Indemnification
`
`Corporation (MVAIC),
`
`located at 110 William Street, New York, New York 10038 (Tel: 212-791-1280)
`
`(Fax: 212-732-1826).
`
`D.
`
`Rental Car Coverage
`
`If you are a New York auto insurance policyholder
`
`and rent a car (for
`
`30 days or less) anywhere in the
`
`United States, regardless of whether you have collision or
`
`comprehensive coverage on your own car, you no longer
`
`need to buy collision damage waiver (“CDW') from the
`
`to reject it.
`
`rental car company.
`
`All auto insurers in New York
`
`currently provide rental vehicle coverage without any extra
`
`charge.
`
`If,
`
`in the future, an auto insurer elects to charge
`
`for this coverage, its policyholders would then have a right
`
`Page 000013
`
`

`
`Car rental agreements vary from rental company to rental company. All must provide whatever
`coverages are required by law, as a matter of financial responsibility, in virtually every state where you
`rent or drive the car. For rentals of 30 consecutive days or less, rental car companies in New York State
`gm sell CDW and cannot charge a renter for the value of lost or damaged private passenger type
`vehicles, subject to a $100 deductible and narrow exceptions. Niany rental companies offer higher liability
`limits at an additional cost. Some rental car companies are also licensed to sell additional accident and
`
`health coverage (beyond required No-Fault benefits) and coverage for personal items stolen from the
`vehicle.
`
`In addition, many credit card companies now provide some type of "collision damage coverage”
`to their cardholders for vehicles they rent with that card. This is separate from any other coverage and
`usually covers losses only in excess of amounts collectible under other existing coverages. You may wish
`to check with your credit card company to verify exactly what protection it provides. Coverage under
`these agreements are now regulated under the New York State Insurance Law and must be underwritten
`
`by a licensed New York State insurer
`
`Ill. OPTIONAL AUTO INSURANCE
`
`Beyond the coverages required by law, most insurance companies offer a wide range of optional
`auto insurance coverages at additional cost. The most popular and valuable options are discussed here.
`
`A.
`
`Bodily Injury Liability
`
`Buying increased bodily injury liability limits is El good idea for consumers seeking to protect their
`
`assets in case of a lawsuit resulting from an auto accident.
`
`if you have assets that you wish to protect,
`
`coverage --
`liability
`injury
`limits of bodily
`you should seriously consider purchasing higher
`$25,000/$50,000, $50,000l$100,000, $100,000l$300,0(I0, or even higher. Some insurers offer policies
`with a combined single overall limit for both bodily injury liability and property damage liability, rather than
`separate limits, which would then pay up to a single maximum amount for all damages caused by one
`accident regardless of how many persons are injured.
`
`B.
`
`Property Damage Liability
`
`Although the requirement for property damage liability coverage is currently $5,000, and, effective
`January 1, 1996, $10,000,
`today many cars that your car could potentially negligently damage are worth
`far more than these amounts. Property damage liability limits of $15,000, $20,000, $50,000 and higher
`are available for a minimal additional premium. Given the rising prices of most new and used cars,
`
`property damage liability limits beyond the $5,000 ($10,000) minimum ought to be seriously considered.
`
`--
`
`Page 000014
`
`

`
`C.
`
`Additional PIP (No-Fault) Benefits
`
`It is often smart to buy more No-Fault protection. over the basic $50,000 level of No-Fault benefits
`
`required by law. Because of No-Fault‘s cost-effective design, extended No-Fault benefits represent a
`
`relatively inexpensive option.
`
`For a modest additional premium, optional coverages are available that will pay more than the
`
`required basic No-Fault benefits, explained in Chapter II. Consumers now have two choices:
`
`o At your option, you may purchase Additional PIP coverage, to raise the limit of No-
`
`Fault benefits available in case of an accident up to $100,000 or higher and, in the
`
`process,
`
`increase the potential maximum amounts of lost earnings payments for
`
`earnings in excess of $2,500 per month, other necessary expenses or the death
`
`benefit, depending on the limit you select. Additional PIP also includes coverage for
`
`you and your family and, unlike basic No-Fault, extends to all out-of-state guest
`
`occupants in your car when driving anywhere in the United States, its territories and
`
`possessions, or Canada. For a minimal charge, you may also purchase additional
`
`personal injury protection solely to cover such guest occupants, without increasing
`the limit of No-Fault benefits.
`
`o
`
`Insurers must offer Optional Basic Economic Loss (OBEL) coverage.
`
`If purchased,
`
`this coverage elevates the required $50,000 of basic economic loss coverage by an
`
`additional $25,000. When the basic limit of $50,000 has been reached on a claim,
`
`this $25,000 can be designated by the injured person to be applied specifically to
`
`payments for loss of earnings from work (wage loss),
`elements of basic economic loss.
`
`for rehabilitation, or to all
`
`Neither of these two additional No-Fault coverage options lengthens the three-year limit within
`
`which wage loss benefits are payable.
`
`The availability of these No-Fault options makes optional medical payments coverage (discussed
`
`in E below) no longer as important as it had been, because that coverage (except for funeral expenses)
`
`responds only if No-Fault does not cover the situation or after No-Fault benefits, when applicable, are first
`exhausted.
`
`D.
`
`Supplementary Uninsured Motorists (SUM) Coverage
`
`As discussed in Chapter II, one of the basic coverages that comes with your policy is bodily injury
`
`protection against the negligent actions of an uninsured or hit-and-run motorist. You have the option to
`
`expand this basic protection. For an additional premium, you can purchase supplementary uninsured
`
`motorists (SUM) coverage, up to the bodily injury liability limits of your policy. An insurer must offer limits
`
`Page 000015
`
`

`
`of up to $100,000 per person per accident and $300,000 per accident ($100,000,/$300,000) if you carry
`
`bodily injury liability limits of that amount or higher. An insurer may offer higher limits at its option.
`
`If you have an accident with another vehicle that is insured but has bodily injury liability limits
`
`lower than yours, or if such vehicle has no insurance at all, SUM coverage will be activated if it has been
`
`purchased. The amounts paid under SUM by your policy up to its SUM limits will be reduced, or offset, by
`
`any amounts recovered from another party's auto insurance liability policy. Thus, if you are ever involved
`
`in an accident with other drivers, you can be sure your family is protected at least to the amount of SUM
`
`coverage you have purchased from your own insurer.
`
`E.
`
`Medical Payments Coverage
`
`This insurance pays, without regard to fault, medical expenses and funeral expenses for you and
`
`persons riding with you, if an accident occurs involving; your car, up to its stated limits..
`
`F.
`
`Accidental Death and Dismemberment (A|.'.‘l&D) Coverage
`
`Some insurers offer coverage that will pay you, your family members, or other occupants of your
`
`car, under the terms of the policy, a set amount for certain serious injuries or death caused by an accident
`
`while in your car. These AD&D amounts are payable in addition to any amounts collected under the No-
`
`Fault, liability, or other parts of the policy.
`
`G.
`
`Collision Coverage
`
`With
`
`this optional
`
`insurance, your own
`
`insurer pays you, without regard to fault, for damage
`
`to your car caused by: collision with another car;
`
`collision with
`
`any other
`
`object;
`
`or your car
`
`overturning.
`
`If you do not have collision coverage, and
`
`your car is damaged in an accident where the other
`
`party is at least partially at fault, you may still recover
`
`
`
`all or part of the damages to your vehicle by making a claim against that other vehicle's property damage
`
`liability insurance coverage, for the proportion of damages for which the other driver was at fault
`
` juuu-:I
`
`Page 000016
`
`

`
`H.
`
`Comprehensive Coverage
`
`Under comprehensive coverage, your insurer pays you, without regard to fault, for damage to
`
`your car from all causes, such as theft (of the car itself or its parts), fire, flood, windstorm, glass breakage,
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`vandalism, hitting or being hit by an animal, or by falling or flying objects.
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`Comprehensive coverage pays if your car is stolen, plus a certain amount per day specified in
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`your policy for transportation expenses (rental car, public transportation, etc.) due to loss of use of your
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`stolen car, generally until the time the company makes an offer to settle your claim.
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`Comprehensive and collision deductible options generally offered are $100, $200 (standard),
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`$250, $500 and $1,000. Coverage may also be sold where the deductible does not apply to window glass
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`damage. Remember, you will not be paid more than the actual cash value of your car (i.e., what the car is
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`worth} at the time of an accident, which takes depreciation into account.
`
`I.
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`Gap Coverage
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`Under the terms of a loan or lease on an automobile, at the time of total loss, there is often a
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`difference between the amount your insurer will pay as Actual Cash Value (under comprehensive or
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`collision coverage) and the amount which you owe to the entity that financed or leased the vehicle (such
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`as a bank or auto dealer). This difference, which can be hundreds or even thousands of dollars, is called
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`the “gap amount". Gap coverage pays this amount in the event of a total loss. There are two different
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`forms of gap insurance. You may either (1) purchase a ‘waiver’ of the gap amount directly from such
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`lender or dealer, who in turn has purchased gap insurance to cover the vehicle, or (2) you may buy a
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`separate policy, or an endorsement to your present policy, to cover this gap amount. When purchasing a
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`waiver, you may wish to verify that the insurer covering the lender or dealer is properly licensed and
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`approved to write GAP coverage by the Insurance Department.
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`Other optional coverages available from some companies are Towing and Labor Coverage,
`Temporary Substitute Vehicle Coverage and Mechanical Breakdown Coverage. You should contact your
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`agent or broker to discuss whether it would be advisable for you to purchase them.
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`Page 000017
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`10
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`IV. THE VOLUNTARY & RESIDUAL MARKETS
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`Many insurers write auto insurance in New York State. When shopping for auto insurance, please
`
`remember that, if one or two agents or brokers are unable to find coverage for you, it does not mean that
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`there is no insurer willing to insure you on a voluntary basis. No given insurance agent or broker will have
`
`contractual relations with all auto insurers doing business in New York. You should ask the particular
`
`agent or broker to identify the specific auto insurance companies to which he or she has access.
`
`However, if you cannot find an auto insurance company that will sell you an auto policy with the
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`required coverages you need or want, the New York Automobile insurance Plan (NYAIP), commonly
`
`known as the Auto Plan or Assigned Risk Plan, is a special insurance facility established under New York
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`State law to assure that coverages are provided. Most agents and brokers licensed to place automobile
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`insurance policies are certified to place coverage through the Auto Plan.
`
`If you cannot locate a certified
`
`broker or agent, you can obtain assistance in finding a certified producer by contacting the Auto Plan
`
`directly at: New York Automobile Insurance Plan, 125 Maiden Lane, New York, New York 10038-4912 (T:
`
`212-943-5100).
`
`The voluntary auto insurance market in New York is competitive and affords coverage to those
`
`consumers an insurance company believes it can insure while realizing a reasonable profit. As the
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`residual market, the Auto Plan is ready to cover those consumers who have been declined coverage in
`
`the voluntary market, usually because of their driving history or status as a newly licensed driver.
`
`Premiums for Auto Plan coverage are generally higher, because the overall loss experience for
`
`this group of drivers is consistently worse, compared 1:o the voluntary market. However, under Auto Plan
`
`rules, drivers can earn significant careful driver discounts if no accidents or convictions take place.
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`When an application is submitted through the Auto Plan, it will be assigned to a particular insurer
`
`among all auto insurers doing business in New York State. Premiums charged in the Auto Plan are
`
`determined according to a unified set of approved rates, no matter which insurer actually underwrites the
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`policy.
`
`The premium for an Auto Plan policy should therefore be the same regardless of which insurer
`
`your application is assigned, and no matter what agent or broker handles your application.
`
`If you obtain
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`different quotations for an Auto Plan policy, be suspicious. There have been cases where an agent or
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`broker “low-ba|ls” by intentionally quoting a lower premium in order to get the business. Please note that
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`the insurer is not bound by inaccurate quotes on the part of the agent or broker, who should be reported to
`
`the Auto Plan and the insurance Department.
`
`Consumers can obtain the following auto coverages through the Auto Plan:
`
`0
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`the minimum limits required by law for bodily injury and property damage liability, basic
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`No-Fault, and uninsured motorists insurance;
`
`i
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`Page 000018
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`11
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`-
`
`o
`
`a
`
`-
`
`optional higher limits up to $250,000/$500,000 in bodily injury liability and up to $100,000
`
`in property damage liability;
`
`OBEL and Additional PIP, providing higher No-Fault limits up to $125,000 on an optional
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`basis;
`
`optional SUM coverage up to $250,000l$500,O00;
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`optional physical damage coverages (collision and comprehensive) up to $35,000, with
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`several deductible options; and
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`- mandatory rental car coverage (described in section D of Chapter II).
`
`In the event that your auto insurance coverage is written through the Auto Plan, the insurer
`
`issuing your policy must keep you for three years before it can nonrenew your policy.
`
`At the end of this three-year period you may shop for a voluntary market policy or re-apply to the
`
`Auto Plan. However, there is no requirement for you to remain in the Auto Plan, and usually you will be
`better off in the voluntary market.
`If, , you can find an insurer in the voluntary market that is
`willing to cover you, you may terminate your coverage with the Auto Plan insurer and obtain coverage
`from the new company. The "short-rate” cancellation charge (discussed in Chapter Xi) does not apply if
`
`you cancel a policy in this situation.
`
`V. ROLE OF AGENT, BROKER OR COMPANY REPRESENTATIVE
`
`
`
`.
`
`.
`
`} .(
`
`‘
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`r’ “"/
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`_
`
`’
`‘H
`(X I
`
`'
`
`'
`
`'
`I
`
`.
`N.’
`
`0
`
`’
`
`You can seek the aid of any licensed insurance
`
`agent or broker when buying insurance, or you may obtain
`
`coverage from an insurance company that deals directly
`
`with the public, either through exclusive agents or through
`its own sales representatives.
`Insurance agents and brokers must pass licensing
`examinations given by the Insurance Department, which
`
`require knowledge about
`
`insurance rules, policies and
`
`practices. The distinction between insurance agents and
`
`brokers is that an agent represents one or more insurers for the purpose of writing policies, while a broker
`
`represents consumers to assist them in obtaining coverage from one of the companies with which that
`
`broker deals. Any of these “producers" (as they are known in the insurance trade) can give you
`
`information about the kinds of policies available and how to best protect yourself.
`
`In addition, your agent
`
`or broker usually will be able to assist you in the settlement of any claims.
`
`if you happen to be declined coverage by an insurer for any reason, be sure to ask for a clear
`
`explanation.
`
`lf coverage can be secured, make sure you determine whether it is on a voluntary or residual
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`Page 000019
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`12
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`market basis, understand which auto insurer is provicling the policy, and request a detailed breakdown of
`the policy's different coverage, deductible