If your home or auto premium increased significantly in New York state, you now have the right to an explanation from your insurance company.
A new law that went into effect in August explains that insurers must accompany renewal bills with an explanation when the premium increase exceeds 10%. The law is in place for qualifying auto and one- to four- family residential policies, though the law excludes any explanation on a premium increase due to insured value added.
Policyholders receiving other increases may request an explanation, which the insurer must provide within 20 days.
The mandate helps consumers learn the primary rating factors behind home and vehicle premium increases. Some of these factors may include: claims history, policy changes, anticipated losses in a rating territory and increased claim costs.
What policies are impacted?
A private passenger vehicle policy, including motorcycles and motorhomes, are covered under this law. It also includes policies that cover loss of or damage to real property, predominantly for residential homes that consist of no more than four dwelling units.
It also applies to an umbrella policy, because the policy covers a motor vehicle.
This law does not apply to general liability policy or a renter’s policy, since those policies don’t cover loss of or damage to real property.
Are the reasons specific when it comes to an increase in costs?
According to New York state, the primary rating factors for the premium increase must be specific enough for the insured to understand what exactly is causing the rate increase. If there are two or more factors, the insurance company is required to include all of those factors.