Supplemental spouse coverage is now included in all N.Y. auto policies
As of Aug. 1, 2023, insurers must include the supplemental liability coverage, but policyholders can opt out.
As of August 1, 2023, all auto insurance policies in New York must include supplemental spousal liability coverage, according to a brief from the New York State Department of Financial Services.
Supplemental spousal is “coverage for an insured’s legal liability for the death of or injuries to a spouse, even where the injured spouse must prove the other spouse’s culpable conduct before recovering damages,” according to the New York chapter of the Independent Insurance Agents & Brokers of America (Big-I). The change applies only to primary auto liability coverage, not umbrella liability coverage.
“We have not heard of instances where one spouse sued another, but the coverage could become important when an insurer for another driver pays for damages and subrogates against the insured driver. It might also become important in relation to a supplementary uninsured/underinsured motorist claim,” the Big-I noted in a bulletin on the law.
According to Lawley Insurance, the law will add $20-$84 to a policyholder’s annual auto insurance costs.
Policyholders can opt out of the coverage, which is included in a policy’s bodily injury liability limits and doesn’t increase those limits. However, they must do so in writing. New York has prepared a declination letter that insurers can pass on to policyholders.
Previously, the state’s insurance law required that this coverage be offered to all insureds, but policyholders had to make a written request to obtain the coverage.
The law was enacted to prevent policyholders from unknowingly waiving supplemental spousal liability coverage, which occurred routinely in the past, according to the United Public Service Employees Union.
The state legislature intended for the law to go into effect immediately after it was passed in January of this year, but the effective date was pushed back to give the state’s financial services department time to update its regulations and forms to comply with the new law, according to Big-I.
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