N.Y. Comp. Codes R. & Regs. tit. 11 § 216.10

Current through Register Vol. 46, No. 45, November 2, 2024

Section 216.10 - Standards for prompt, fair and equitable settlement of third-party property damage claims arising under motor vehicle liability insurance contracts

This section is applicable to claims arising under motor vehicle liability insurance contracts affording coverage for claims of property damage by third parties caused by the alleged negligence of the insured. The following provisions of this Part shall also be applicable to these claims: sections 216.0(a), (b), (d), (e); 216.1; 216.2(preamble); 216.3; 216.4(b), (c), (d), (e); 216.5; 216.6(a), (b), (e)-(g); 216.7(a), (b)(4)-(6), (11)-(13), (c)(1), (3), (4); and 216.11.

(a) Within 15 business days of receipt of notice of claim, the insurer shall send either written acknowledgment of the receipt of notice of claim, or payment, to the claimant or the claimant's representative.

(1) When notice of a claim is received from a claimant or the claimant's representative, and the insurer is of the opinion that it is not liable for any payment, then its sole obligation shall be to advise the claimant in writing that it is the insurer and furnish the claimant with its policy number and deny the claim, setting forth the reasons therefor.

(2) If the insurer is unable to verify coverage of the insured, its written acknowledgment shall indicate such fact and request any additional information as may be needed to ascertain the existence or absence of coverage. Upon verification of coverage, the insurer shall provide the notification pursuant to paragraph (3) of this subdivision.

(3)

(i) In all other claims, the written acknowledgment by the insurer shall inform the claimant that the insured has a policy which, to the extent of the insured's negligence, provides coverage for property damage, including the loss of use of damaged property and any other out-of-pocket expenses reasonably attributable to the accident. The acknowledgment shall also state that in no event will the recovery against the insurer exceed the maximum amount of the policy. The acknowledgment shall contain an explanation of the comparative negligence rules in New York, to the effect that, should the insurer's investigation determine that its insured is only partially liable, coverage of the property damage, loss of use and other expenses will only be partially reimbursed in accordance with the percentage that the insured is found to be at fault in the accident.

(ii) Concurrent with the acknowledgment, the insurer shall send a claim form or shall request by telephone or personal contact any pertinent additional information necessary for the insurer to reach a final evaluation of the claim. Within 10 business days of acknowledgment of the claim or the receipt of the information requested when acknowledging the claim, the insurer must request any additional information required to process the claim. If, during the investigation, additional information will be required, the insurer must initiate a request for such information within 10 business days after the need for the information is established. If the insurer is advised by the claimant that the claimant is pursuing recovery under another policy, the insurer may suspend action on the claim.

(4)

(i) Limitations for adjustment of rental vehicle claims for vehicles rented in New York State. With respect to the rights of authorized drivers and insurers to inspect rental vehicles, notwithstanding any other provisions of this Part, insurers are also subject to the provisions of section 396-z(5)(c) of the General Business Law, effective February 24, 2003, which provides as follows:

"Within seventy-two hours of return of the vehicle, the authorized driver or his or her insurer must notify the rental vehicle company that he or she wishes to inspect the damaged vehicle. The inspection must be completed within seven days of the return date of the vehicle. If the authorized driver or his or her insurer does not request this inspection within the seventh-two-hour period, the authorized driver or his or her insurer will be deemed to have waived this right. If the rental vehicle company determines the damaged vehicle to be a total loss and subject to salvage, such seventy-two-hour period for notification or waiver of the wish to inspect the damaged vehicle shall not apply, and the authorized driver or his or her insurer shall have 10 business days from the authorized driver's receipt of notification from the rental vehicle company pursuant to paragraph (a) of this subdivision [section 396- z(5)(a)] to inspect the damaged vehicle, unless the rental vehicle company agrees to provide access to such damaged vehicle beyond the 10 business days provided herein."

(ii) Section 396-z(5)(c) of the General Business Law further provides:

"Within the limits provided in this paragraph, the rental vehicle company shall identify the repairer of, and provide access to, the damaged vehicle, in order to verify the nature and extent of damages, repairs and repair costs, and/or repair estimates."

(b) If a claimant has given notice of loss and the insurer has not received notice of the incident from its policyholder, then, within seven business days after notice by the claimant the insurer shall notify the policyholder that failure to give notice and to cooperate with the insurer may result in the company disclaiming liability and the possibility that the policyholder will be held personally liable. A form shall also be furnished to the insured for the insured's use in detailing the incident unless the insurer shall accept a prior telephone or personal contact which has resulted in securing the required information.

(c) If the insurer determines that there was no policy in force or that it is disclaiming liability because of a breach of policy provisions by the policyholder, the insurer shall inform the claimant in writing within five business days of such determination.

(d) Insurers shall report to the NICB, in a manner consistent with section 216.8(d)(2) of this Part, vehicles involved in a property damage claim where the damage to the motor vehicle is in excess of $2,500.

(e) Within 10 business days of the completion of its investigation of a property damage claim, the insurer shall:

(1) make a written offer which is first computed in the same manner as would be used if the claim were made under a first-party coverage by one of its insureds, and, if applicable, modified to give effect to the comparative negligence statute of this State, or any other state subject to policy limits. Any offer based on comparative negligence shall contain a factual and complete explanation of the insurer's basis for apportioning culpability. If the claim presented is greater than policy limits, then the claimant must be so advised; or

(2) deny the claim in writing, giving specific reasons therefor.

(f) If the investigation is not complete 60 calendar days subsequent to the claimant's notice of loss, the insurer shall send a written explanation of the specific reasons for the delay in claim settlement. An updated letter shall be sent every 60 calendar days thereafter, but the insurer must within six months of the notice of loss advise the claimant of its decision pursuant to paragraph (e)(1) or (2) of this section. This requirement shall cease to be applicable after a claim has been placed into litigation or the insurer advises the claimant of its decision.

(g) In the processing of third-party property damage claims, the time limitations of subdivisions (e) and (f) of this section shall not be applicable if there is objective evidence available for review by Department of Financial Services examiners that anyone involved in the accident who may assert a bodily injury liability claim against the insured has sustained a serious injury as defined in section 5102 of the Insurance Law. Such claim shall be settled or denied in accordance with the provisions of section 216.6 of this Part.

(h) This section shall not be applicable to subrogation claims.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 216.10