The Office of General Counsel issued the following opinion on April 8, 2002, representing the position of the New York State Insurance Department.
RE: Regulation 79 and Waivers of Mandatory Inspection Requirements.
Does the waiver of the mandatory inspection requirement under New York Comp. Codes R. & Regs. tit. 11, § 67.3(b)(3) (2000) (Regulation 79) apply to both new and used additional and/or replacement private passenger automobiles?
Yes. The waiver of the mandatory inspection requirement under New York Comp. Codes R. & Regs. tit. 11, § 67.3(b)(3) (2000) (Regulation 79) applies to both new and used additional and/or replacement private passenger automobiles.
No specific facts were provided relative to the above question.
N.Y. Ins. Law § 3411 (McKinney 2000) provides guidelines for the issuance of private passenger automobile1 physical damage policies, including the requirements pertaining to mandatory inspections.
Specifically, section 3411(d) requires insurers to inspect a private passenger automobile prior to the issuance of a new policy. Pursuant to section 3411(e), an insurer may require the inspection of a vehicle as condition of renewal of an automobile physical damage policy. Additionally, section 3411(g) provides that if an insured acquires an automobile, subject to the provisions of this section, as a replacement for or an addition to an automobile insured for physical damage coverage and the insured requests physical damage coverage for the replacement or additional automobile, such coverage shall not be effective before an inspection is made.
In accordance with section 3411 (m)(2), New York Comp. Codes R. & Regs. tit. 11, § 67.3 (2000) (Regulation 79) provides circumstances under which an insurer may waive or dispense with the mandatory inspection requirements. In regard to older vehicles, section 67.3 (b)(1) provides that an insurer may waive the inspection requirement:
(b)(1) During calendar year 1982, [for] all 1975 and older model year vehicles. On January 1, 1983, and on each January 1st thereafter, the applicable model year shall be moved forward by one year. For example: in 1982 an insurer must inspect 1976 and newer model year vehicles and in 1983 an insurer must inspect 1977 and newer model year vehicles.2 An insurer may, in its filed plan of operation, elect to inspect specified vehicles included within this waiver. Such exceptions to this optional waiver must be based on underwriting criteria uniformly applied.
In regard to new, unused vehicles, section 67.3 (b)(2) states, in pertinent part, that an insurer may waive the inspection requirement:
(b)(2) Where a new, unused automobile is purchased or leased from a franchised automobile dealership and the insurer is provided with either a copy of the bill of sale which contains a full description of such automobile, including all options and accessories, or a copy of the lease or MV-50 form, provided by the Department of Motor Vehicles, which establishes transfer of ownership from the dealer to the customer and a copy of the window sticker or advanced dealer shipping notice (invoice) showing the itemized options and equipment in addition to the total vehicle at the time of sale or lease. . . .(emphasis added)3
For additional and/or replacement vehicles, section 67.3(b)(3) provides that an insurer may waive or dispense with the inspection requirement "where the named insured has been continuously insured with the same insurer, or affiliate, for four or more policy years." Since section 67.3(b)(3) makes no exclusion for either new or used automobiles, it applies to both new and used additional and/or replacement automobiles.
For further information, you may contact Attorney Pascale Joasil at the New York City office.
1The term "private passenger automobile" is defined by N.Y. Comp Codes R. & Regs. tit. 11, § 67.1 (a) (2000) as "all owned or leased 4-wheeled motor vehicles including: station wagons, jeep-type vehicles, pick-up trucks, panel trucks, delivery sedans and vans, except vehicles weighing more than 6, 500 pounds unloaded. This definition shall apply solely to the mandatory inspection requirements for private passenger automobiles contained in section 3411 of the Insurance Law."