The Office of General counsel issued the following informal opinion on August 22, 2001, representing the position of the New York State Insurance Department.
Re: Cancellation Provisions Regarding Animal Insurance
Which provisions of the New York Insurance Law apply to cancellation of animal insurance when the insured animal is a household pet that is not used in the conduct of a business?
Animal insurance is an authorized kind of insurance pursuant to N.Y. Ins. Law § 1113(a)(11) (McKinney 2000). Where the insured animal is a household pet that is not used in the conduct of a business the cancellation provisions that apply to such policy are those that are contained in N.Y. Ins. Law § 3425 (McKinney 2000).
The Department was inquired as to whether the cancellation provisions pertaining to accident and health insurance or personal lines insurance apply to "pet insurance", or whether the specific provisions contained in the actual policy apply. The inquirer stated that the reference to "pet insurance" was a reference to insurance of an animal that is owned as a household pet and not one that is used in the conduct of a business.
Animal insurance is an authorized kind of insurance pursuant to N.Y. Ins. Law § 1113(a)(11) (McKinney 2000), which states:
(a) The kinds of insurance which may be authorized in this state, subject to other provisions of this chapter, and their scope, are set forth in the following paragraphs. The power to do any kind of insurance against loss of or damage to property shall include the power to insure all lawful interests in such property and to insure against loss of use and occupancy, rents and profits resulting therefrom. No kind of insurance shall include life insurance, title insurance or insurance against legal liability for personal injury or death unless specified in this section. In addition to any power specifically conferred by this chapter to engage in any other kind of business than an insurance business, any insurer authorized to do business in this state may engage in other kinds of business to the extent necessarily or properly incidental to the kinds of insurance business it is authorized to do in this state.
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(11) "Animal insurance," means insurance against loss of or damage to any domesticated or wild animal resulting from any cause.
Generally speaking, domesticated animals that are kept as pets are considered to be personal property. Hence, where an insured animal is a household pet that is not used in the conduct of a business the cancellation provisions that apply to such policy are those that are contained in N.Y. Ins. Law § 3425 (McKinney 2000).
N.Y. Ins. Law § 3425 (a)(2)(B) (McKinney 2000) states:
(a) This section shall apply to covered policies of insurance as defined in paragraphs one, two and three hereof.
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(2) "Covered policy" also means a contract of insurance, referred to in this section as "personal lines insurance", other than a contract of insurance defined in paragraph one hereof, issued or issued for delivery in this state, on a risk located or resident in this state, insuring any of the following contingencies:
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(B) loss of or damage to personal property in which natural persons have an insurable interest, except personal property used in the conduct of a business; .
The cancellation provisions contained in § 3425 override and supersede any conflicting provisions contained in a personal lines policy that provides animal insurance where such provisions do not provide at least as much protection to the insured as provided by § 3425.
For further information you may contact Senior Attorney Sally Geisel at the New York City Office.