California isn’t the only state experiencing changes in auto insurance rates: A recent law has mandated that all New York drivers be enrolled in more expensive auto insurance coverage

A recent state law in New York has led to the automatic enrollment of every driver in the state into more expensive and expanded auto insurance coverage. This includes a significant number of unmarried drivers who won’t actually benefit from this coverage, which enables individuals to sue their spouses for damages related to negligent driving.

This law does not distinguish between married and unmarried drivers, and despite warnings from insurance companies last year that approximately half of the state’s drivers would be enrolled in coverage that wouldn’t be advantageous to them, Governor Kathy Hochul signed the bill into law without addressing this concern.

Residents of New York have already been grappling with some of the highest auto insurance costs in the nation. This new law was promoted by influential state trial lawyer groups, despite objections from some lawmakers who believed it would primarily serve to generate more lawsuits for attorneys.

As of August 1st, the law has taken effect. Insurance companies are now required to add the supplemental coverage to individuals’ plans and provide written notification of this addition whenever auto insurance is issued, renewed, or modified in the state. However, there are concerns that many consumers might not notice the change, leading to potential blame being placed on insurers when higher premiums are eventually recognized.

Sen. Neil Breslin, the chair of the Senate Insurance Committee and the sponsor of the supplemental insurance bill, has expressed openness to potential amendments to ensure that people aren’t unknowingly paying for coverage they don’t benefit from.

Under the new law, state insurance companies must enroll customers in “supplemental spousal liability insurance.” This coverage allows for a scenario where, if a driver is at fault in a car accident in New York, individuals who sustain significant injuries can sue the negligent driver for damages, including non-economic damages like pain and suffering. However, if the injured person is the spouse of the negligent driver, they typically cannot sue and recover money from their spouse’s insurance policy, unless the driver had the “supplemental spousal liability insurance.”

Before this law, insurance companies were required to offer the supplemental coverage, but policyholders had to actively opt-in to receive it. The new law removes the opt-in requirement.

Despite concerns raised by insurance companies and industry groups, the law was supported by the state Trial Lawyers Association and the state Academy of Trial Lawyers, both of which advocated for its passage.

It’s worth noting that this law is just one part of a broader context of legal and insurance-related changes in New York, where various interest groups and political dynamics play a role in shaping the legislative landscape. Governor Hochul’s stance on certain issues has varied, and not all of her decisions align with the preferences of trial lawyer groups, as evidenced by her veto of the “Grieving Families Act.”