Why New York Drivers Are Paying More for Car Insurance

Most New York State residents may have noticed a rise in their auto insurance premiums, and the reason behind it is a new law that went into effect on August 1. The law requires auto insurers to add a new line of coverage called supplemental spousal liability insurance for all drivers, even those who are unmarried or purchasing coverage for a business.

The cost of auto insurance in New York has been increasing, and this new coverage requirement adds to the burden. However, it’s worth noting that married individuals may benefit from this coverage, as it allows the injured spouse to seek a bigger payout if they are seriously injured in an accident caused by their spouse. Previously, policyholders could choose to opt into this coverage, but now it is automatically included unless they opt out in writing.

The supplemental spousal liability coverage is aimed at addressing a less common scenario where a married couple is involved in an accident, and the injured spouse’s expenses exceed the limits of the existing coverage. This additional coverage allows the injured spouse to sue their driving spouse and seek compensation for damages and pain and suffering.

While it may seem unusual to sue one’s own spouse, proponents of this change argue that many policyholders are surprised to learn that their spouses aren’t covered under their auto insurance policies. This law aims to correct that and provide low-cost coverage for a rare but potentially impactful situation.

The New York Trial Association, along with personal injury lawyers, has been advocating for this law change for over a decade. On the other hand, the insurance industry did not support the law, citing concerns about consumer confusion.

This coverage requirement is unique to New York and not commonly mandated in other states. However, it is possible to sue one’s spouse and recover damages in other states. The importance of reviewing and discussing policy coverages with insurance companies or agents is emphasized, as consumers should ensure their policies meet their specific needs.

If policyholders wish to opt out of the supplemental spousal liability coverage, they can do so by contacting their insurer and submitting the necessary declination form. The New York Department of Financial Services also provides a declination form on its website.

Consumers who are unable to opt out despite their efforts can file a complaint with the Department of Financial Services.

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