N.Y.: PIA-priority ‘bait-and-switch’ becomes law 

December 26, 2023

For years, PIA has fought for increased consumer protections during the automobile insurance underwriting process. PIA won a major victory in that fight today when New York Gov. Kathy Hochul signed into law S.5764B, which takes aim at the harmful bait-and-switch tactic sometimes employed in personal auto insurance. 

Bait-and-switch refers to the practice in the insurance community of certain carriers of personal automobile policies binding coverage based on an initial quote and questionnaire with the insured, and then raising the premium following a check of the insured’s driving history.  

PIA objects to this practice. Responsible insurance agents and companies utilize all available underwriting resources prior to binding a policy for an insured. The practice of intentionally disregarding driver history information to present a false price to an insurance consumer undermines the credibility of the insurance industry as a whole. Consumers should be able to rely on the quotes for insurance policies to be fair and accurate so they can determine whether the coverage is affordable. 

Under the new law, bait-and-switch practices will no longer be allowed. Insurance carriers will be required to make a good-faith attempt to verify a consumer’s driving record, as well as the driving history of any listed driver on the application, prior to binding a personal auto policy.   

Changes to come 

While the governor signed bait-and-switch into law, she did not do so unequivocally. The bill was signed with the understanding that when the Legislature returns to session in January, its members will pass additional legislation making changes to the new law.  This is referred to as a chapter amendment.  

Among the governor’s changes is limiting the scope of the law to an individual’s New York state driving history, as well as the removal of a requirement that insurance carriers verify the driving history of all drivers at the time of policy renewal.  

PIA supports the removal of this requirement. The bait-and-switch practice the law is intending to combat occurs only on new policies. That is due to a provision in the insurance law that allows insurance carriers to make changes to new auto policies within 60 days of the binding of the policy. There is no similar 60-day window for renewals.  

The requirement to run motor vehicle reports on renewal would not have prevented any bait-and-switch practices. It could have impacted policyholders adversely and increased costs for carriers and agents though through the increased costs associated with running MVRs at every renewal.  

 PIANY would like to thank the Sen. Neil Breslin, D-44, and Assemblyman David Weprin, D-24—sponsors of the bait-and-switch bill in the Senate and Assembly, respectively—for their strong leadership and support on this important consumer protection issue. 

The new law will go into effect on Wednesday, June 19, 2024.

Bradford J. Lachut, Esq.
PIA Northeast | + posts

Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.

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