Another day, another PIANY legislative priority has been introduced. Assemblyman David Weprin, D-24, the new chair of the Assembly Insurance Committee, introduced A.4668, which would restrict the harmful “bait and switch” practice in personal auto insurance, on Feb. 22, 2023.
Bait and switch is the colloquial term used to describe when an insurance company verifies an insurance applicant’s driving history after the applicant has paid the premium on a personal auto policy.
Often, a person’s driving history is used by insurance companies as an underwriting factor in setting premium. Verifying an applicant’s driving history after the policy is bound and premium is paid can have a significant impact on premium. This can lead to a situation in which a policyholder’s premium is increased substantially shortly after the policy is bound. In many cases, policyholders have no idea when they agree to the terms and the price of the policy, that the policy could be rerated, and premiums could increase.
Under the terms of the legislation, if an insurance company uses driving history as a rating or underwriting factor, it is required to verify the driving history of the applicant, as well as any named-drivers listed on the insurance application, prior to binding the policy, or taking any premium. If a representative of the insurance company fails to verify the driving history prior to binding, an adjustment of premium would be prohibited until the policy is renewed.
The bill has been referred to the Assembly Insurance Committee for consideration. PIANY strongly supports this legislation and thanks Chairman Weprin for his sponsorship of the bill.
If you want to get involved with PIANY’s legislative and advocacy work, there are many ways to engage with the association:
- participate in PIANY’s District Office Visit Program;
- become a member of Agents Advocacy Coalition; and
- watch your PIA Northeast publications and PIA Northeast’s social-media channels for important New York updates, and share them with your followers.