The Office of General Counsel issued the following informal opinion on May 22, 2001, representing the position of the New York State Insurance Department.
Re: Mechanical Breakdown Insurance
May an insurer issue a stand-alone policy covering mechanical breakdown relating to a motor vehicle or aircraft or must the coverage be part of a more comprehensive insurance policy?
Insurers may issue stand-alone policies covering mechanical breakdown.
Ms. A, of Insurance Agents Association B, is unsure as to whether the Departments opinion letter dated September 5, 2000 that she enclosed means that mechanical breakdown insurance may be written separately in New York or as part of a policy providing other coverage. She explicitly makes the assumption in her facts that the separate mechanical breakdown policy "is properly filed and approved."
To clarify for Ms. A the opinion letter in question, an insurer has the option of filing with the Department motor vehicle or aircraft mechanical breakdown coverage that stands alone or is part of more comprehensive coverage. N. Y. Ins. Law § 1113(a)(19) (McKinney 2000).
For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City office.