N.Y.: Anti-arson applications: Outdated, burdensome and harmful to consumers

For decades, New York’s Section 3403 of the Insurance Law has required property owners to complete an annual anti-arson application as a condition for obtaining property insurance coverage for fire or explosion damages. While this mandate was created in the late 1970s to address a spike in arson cases in major cities, the requirement has become outdated and counterproductive, causing significant harm to consumers.

The anti-arson application forces property owners to complete and submit a form annually to maintain their property insurance. If the form is not filed on time—often due to administrative oversight rather than fraudulent intent—the insurer is required by law to cancel the policy. This cancellation creates substantial coverage and financial risks for policyholders.

The cost of an overdue form

When an anti-arson application is not submitted, the penalties are severe: the insurance policy is canceled. This not only leaves the property uninsured but also burdens the property owner with additional costs to replace the canceled policy. The process of securing a new policy can cost a minimum of $150 and often much more, depending on the situation. These unnecessary expenses fall on consumers who may have simply missed a deadline, rather than engaging in any fraudulent activity.

Worse, the cancellation creates gaps in insurance coverage, which can have catastrophic financial consequences for property owners. If a fire or explosion occurs during a coverage gap, the owner may face total financial ruin. Furthermore, third parties who might suffer damages—such as tenants, neighbors or contractors—are left without a reliable source of economic recovery.

Archaic and redundant

The anti-arson application was a valuable tool when it was created nearly 50 years ago, but modern advancements have rendered it obsolete. Since 1996, insurers have been required to file detailed fraud-prevention plans with the state, using sophisticated methods and technology to detect, investigate and prevent arson and other types of insurance fraud. These measures have far outpaced the utility of the anti-arson form.

Technological advancements also now allow insurers to access comprehensive data on properties, ownership histories and mortgages. These tools are far more effective at identifying potential fraud risks than a form filled out by a property owner. In today’s world, the application is a redundant, outdated bureaucratic hurdle that does little to enhance fraud prevention.

Harm to consumers far outweighs any benefits

While the intent of the anti-arson application was admirable when first introduced, its continued enforcement has become more harmful than helpful. The minimal value it may offer in detecting fraudulent activity is far outweighed by the financial and coverage risks it imposes on policyholders. Consumers face significant penalties for failing to file a form that has outlived its usefulness, while insurers already have better tools to prevent arson-related fraud.

PIANY’s role in repealing outdated requirements

PIANY has long advocated for reforms to insurance laws that protect consumers and ensure fair practices. A major victory came with PIANY’s successful push to repeal anti-arson application requirements for the city of Buffalo. Recognizing that these applications disproportionately harmed consumers and created unnecessary coverage gaps, PIANY’s efforts helped remove this barrier for Buffalo property owners. The repeal served as a model for statewide reform, as the city of Rochester soon after removed its anti-arson requirement. This highlights the need to eliminate outdated requirements across New York state.

The case for repeal

Legislation currently under consideration—A.112, sponsored by Assemblymember Sam Berger, D-27—proposes repealing Section 3403 of the Insurance Law. This measure is critical to protecting consumers from unnecessary administrative burdens and financial risks.

By eliminating the anti-arson application requirement, New York City would:

• Prevent unnecessary policy cancellations, ensuring continuous coverage for property owners.
• Reduce financial strain on consumers, who often face steep costs to replace canceled policies.
• Enhance consumer protection, as modern fraud-prevention tools already provide more effective safeguards against arson-related fraud.

A call to action

PIANY strongly supports the repeal of Section 3403 and urges lawmakers to pass this bill. It is time to acknowledge that the anti-arson application is no longer a necessary tool in today’s insurance landscape and is, instead, a harmful relic of a bygone era. Protecting consumers and ensuring fair access to property insurance must remain a priority, and repealing this outdated requirement is a step in the right direction.

Get involved

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.