New legislation amends Section 2335 of New York's insurance law, which limits insurance companies from levying surcharges on a policyholder after a motor vehicle accident involving property damage.

Section 2335 now prohibits insurers from raising auto premiums after an accident, unless the amount of property damage exceeds $2,000. The prior threshold was $1,000 and was in effect since 1991. The new legislation is intended to help contain premium costs by preventing auto insurance surcharges for minor accidents. The legislative change, however, does not prevent insurers from levying surcharges for accidents involving personal injury, regardless of the amount of property damage. The property damage threshold is tied to Section 605 of the Vehicle and Traffic Law, which sets the monetary amount of property damage that must be exceeded in order to require a report of the accident to the Commissioner of Motor Vehicles.

Case Law Alert - 3rd Qtr 2010