When Tessa Fiscella went to add her new car to her insurance earlier this month, she was surprised to learn a new charge had been added to her bill.
On Aug. 1, a new New York law went into effect requiring insurance companies to automatically add supplemental spousal liability insurance to every New York policy holder’s bill, unless that person opts out of the coverage in writing. The law was signed by Gov. Kathy Hochul in December 2022.
The additional insurance provides coverage for a person who is injured or killed in a motor vehicle accident caused by the negligence of the person’s spouse. It could cost New Yorkers an additional $20 to $84 annually, according to American Property Casualty Insurance Association vice president Kristina Baldwin.
Previously, New York law only required insurers to offer the insurance as an option, Baldwin said.
Fiscella, 33, of Fairport, did receive an email from Geico about the change, but said it wasn’t sent until a day after the change went into effect and it landed in her junk folder.
Also, she’s not married.
“I was just annoyed,” Fiscella said. “I have no husband to sue … so why am I paying this?”
Who benefits from the change?
Married individuals can benefit from the new policy.
However, unmarried individuals are also included in the coverage with no benefit from the change, which has set off some alarms throughout the insurance world.
“There is no reason that an insured (person) should have to specifically decline this coverage in a separate written document,” Baldwin said in a written statement. “The choice as to what insurance to purchase to protect the insured should remain in the control of the insured.”
And New York Insurance Association president Ellen Melchionni said opt-out mechanisms “are not consumer friendly” and “bound to lead to greater confusion.”
The law includes a sunset date of July 2027, which will allow reevaluation of the change and ultimately result in re-authorization or repeal.
How is heat affecting your car battery?Summer heat takes a toll on your car battery: How to extend its lifespan
How can you opt out of car insurance add-on?
A declination form can be found on the state’s Department of Financial Services website, which Fiscella said she completed through her Geico app.
The process was fairly straightforward and instant, Fiscella said, and she made sure her parents, and people on Facebook, and were aware of the change.
“It was just kind of shocking to me, that’s why I posted it,” Fiscella said. “People do need to check this stuff. If you can save $7, it all adds up.”
Car purchases:What extra fees can you face when buying a car?
Emily Barnes is the New York State Team Consumer Advocate Reporter for the USA Today Network. Contact Emily at ebarnes@gannett.com or on Twitter @byemilybarnes. To get unlimited access to the latest news, please subscribe or activate your digital account today.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.