Can't We Waive the Auto Photo Inspection?

Question from an IIABNY member: A carrier advises that when we submit new business that has a prior automobile photo inspection, they are prohibited from accessing the information that is in the inspection company's database, and in most cases we need to do a new photo inspection. The exception is if the insured has a copy of their inspection or if the agent has one. 

Now they are telling me that the law changed and under Regulation 79 they are not permitted to accept the Bill of Sale and window sticker that we had on file for another carrier when we first added a new unused vehicle. My understanding was the agency has the ability (not required), at their discretion, to waive photo inspection when coverage is transferred, in an independent agency, from one of our carriers to another. Which is correct?

Answer: The waiver section of Reg 79 has not changed since 1997. Here’s the relevant text:

(b) An insurer may waive or dispense with a mandatory inspection under any of the following circumstances:…

(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 retail price of the vehicle on which will be added any dealer installed options installed on the vehicle at the time of sale or lease. The physical damage coverage on such new, unused automobile shall not be suspended during the term of the policy due to the insured's failure to provide the required document(s). Payment of a claim shall be conditioned upon receipt by the insurer of such document(s) and no physical damage loss occurring after the effective date of coverage shall be payable until the document(s) are provided to the insurer. If the above document(s) are not submitted by the insured 60 days prior to the annual renewal date, the insurer upon renewal of the automobile physical damage insurance must require a physical inspection, pursuant to the provisions of section 67.7 of this Part…

(6) Where a producer is transferring a book of business from one insurer to other insurer(s).

(7) When an individual insured's coverage is being transferred by an independent insurance agent (as defined in section 2101(b) of the Insurance Law) to a new insurer and said agent provides the new insurer with a copy of the inspection report completed on behalf of the previous insurer, provided the independent agent represents both insurers, and the insured vehicle was physically inspected by the previous insurer.

Based on paragraph (7), I’d say that the new insurer cannot waive the physical inspection if the prior insurer only had the bill of sale and sticker and did not inspect.

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Comments

[Dan Williams]

I'd be curious to see how many carriers have actually fenied physical damage coverage because an inspection was not done in the 5 day period

[Los Angeles Auto Insurance]

Wonderful work! I also have my own , personal weblog I simply think it is tough to write excellent information like this.

[Tim Dodge]

Dan,

I'd be interested to see that, too, but I don't think anyone is collecting that data on an industry-wide basis. The Insurance Department might have some information based on complaints it receives, but that would necessarily be incomplete because only a fraction of those who receive claim denials file complaints.

[Diana Pabon]

I am unfamiliar with the auto photo inspection. I think it would be better for a company to take their own pictures. Different angles and perspectives may alter the result! I need car insurance, help!