On April 20, 2024, Gov. Kathy Hochul signed into law Chapter 56 of the Laws of 2024, marking a decisive change in how insurance companies can interact with property owners who house tenants utilize federal housing vouchers.
According to an investigative report by the Gothamist, insurance companies routinely inquired whether building owners rented to tenants with housing subsidies, such as those utilizing the federal Section 8 housing program. These companies would then refuse to insure those buildings, placing both landlords and tenants in precarious situations, without insurance. Not only are these practices discriminatory, but they reduce housing options during a time when New York state is experiencing a scarce housing market.
In response to the findings uncovered by the Gothamist, Gov. Hochul took decisive action by including a proposal in her 2025 Executive Budget, known as TED, Part FF of S.8308-A/A.8808-A. This proposal aimed to prohibit insurance companies from making decisions based on the income source of tenants or the presence of Section 8 vouchers, specifically seeking to prevent policy cancellations or premium increases based solely on these grounds.
Legislative action
The New York state Senate showed its support for Gov. Hochul’s proposal through S.8308-B, reflecting a strong alignment with her vision for fair insurance practices.
On the other hand, the state Assembly advanced a slightly modified version, A.7910-A, through the Assembly Insurance Committee. Despite these differences, both versions underscored the critical need to protect property owners and tenants in affordable housing from being unfairly targeted.
The new law
The law prohibits insurers from inquiring about or making decisions based on the income level or source of tenants who are not the property owners, whether the property includes residential units that must be affordable to residents at specific income levels as dictated by statutes, regulations, or agreements with government entities and the receipt of government housing subsidies, including federal Section 8 vouchers.
However, the law does allow insurers to refuse applications, cancel policies or adjust premiums based on other underwriting or rating factors, provided these actions are not influenced by the prohibited criteria mentioned above. This ensures that while insurers maintain their ability to manage risk, they must do so without discriminating against low-income tenants or those utilizing housing subsidies.
To ensure the efficacy of the law, on June 24, 2024, the New York State Department of Financial Services published a circular letter to remind insurers—including insurers authorized to write property/casualty insurance in New York, licensed insurance producers, the Excess Lines Association of New York, and the New York Property Insurance Underwriting Association—of their obligation to comply with New York Insurance Law Section 3462, and that they can no longer inquire about on an application, cancel, refuse to issue, refuse to renew or increase the premium of a policy, or exclude, limit, restrict or reduce coverage under a policy based on the fact that the property being insured constitutes affordable housing.
Theophilus Alexander
Theophilus W. Alexander joined PIA Northeast as a government & industry affairs specialist for the Government & Industry Affairs Department in 2023. Prior to joining PIA, Theo had served in both houses of the New York State Legislature. Previously, he worked as a legislative analyst for Hon. New York State Sen. Samra G. Brouk, D-55, and he served at the New York State Assembly, as a policy analyst with New York Assembly Program & Counsel. Theo received his Bachelor of Arts degree in Politics from Ithaca College in Ithaca, N.Y.
