This Proposed NY Law Could Change What You Pay for Insurance
A new piece of legislation in New York is stirring conversation across the insurance industry, and for good reason. Assembly Bill A.10524, introduced on March 6 of this year, could significantly reshape how auto insurance premiums are calculated in the state. Known as the “Motor Vehicle Insurance Fairness” bill, it aims to eliminate the use of several long-standing rating factors, including credit scores, income levels, and certain geographic indicators like zip codes.
While the bill is still in committee, its potential impact is substantial. At DRO Insurance, we’re closely monitoring its progress to help our clients stay informed and prepared.
What the Bill Proposes
At its core, A.10524 seeks to remove what some lawmakers view as unfair or discriminatory pricing practices.
If passed, insurers would no longer be allowed to use factors such as:
- Consumer credit scores
- Income or wealth levels
- Education background
- Homeownership status or property value
- Employment or occupation (with limited exceptions)
- Prior insurance history or gaps in coverage
The bill also places strict limitations on the use of geographic data. While insurers could still consider territory in some cases, their influence on pricing would be capped at 25% of the premium and only when tied directly to auto-related risks like accident or theft rates. For underwriting decisions (like approving or denying coverage), geographic factors would be completely off-limits.
A Push for Fairness and Transparency
One of the most notable aspects of the bill is its focus on eliminating disparities.
Insurers would be required to prove that their practices, including algorithms and predictive models, do not disproportionately impact individuals based on protected characteristics such as race, gender, religion, or disability.
Transparency is also a central theme. Rate filings would become public, accessible through an online database where consumers could review proposed increases, submit comments, and even request to participate in hearings.
New Rules for Rate Changes
The legislation introduces a “prior approval” system for rate adjustments.
This means insurers must:
- Submit detailed applications justifying any rate change
- Wait through a 60-day public review period
- Participate in hearings for larger increases (over 7% for personal auto policies)
The burden of proof would fall squarely on insurers to demonstrate that rate changes are fair and justified.
What This Could Mean for Drivers
If enacted, this bill could fundamentally change how premiums are calculated.
For some drivers, particularly those with lower credit scores or those living in higher-risk zip codes, it may lead to more equitable pricing. For others, especially those who previously benefited from favorable credit or geographic factors, rates could shift in unexpected ways.
It’s also possible that insurers will need to rethink how they assess risk altogether, potentially leading to broader changes in policy offerings and pricing structures.
Navigating changes like these can be confusing, but you don’t have to do it alone.
DRO Insurance works with a wide network of trusted carriers, allowing us to compare options and find coverage tailored to your unique situation, no matter how regulations evolve.
If you have questions about how this proposed law could affect your current policy or future rates, our team is here to help. We can review your coverage, explain your options, and make sure you’re positioned to get the best value for your auto insurance.
Dayton Ritz + Osborne Insurance proudly serves the Hamptons area. Call today at 631-324-0420 or visit our website.