If your New York auto or home policy renews after August 24 and the premium is up more than 10%, your insurer has to hand you the dollar amount and the specific reasons behind it. You don’t have to ask. It comes with the bill.
If the increase is 10% or less, you do have to ask. Then they have 20 days.
That’s Insurance Law Section 2356, passed in the state budget in May and effective August 24. The Department of Financial Services published its guidance for carriers ahead of the date, along with answers to the questions the industry sent in.
Two things in there are worth your time.
First, DFS isn’t leaving room for a form letter. The guidance says the primary rating factors must be “specific enough so that the insured understands what factor(s) are causing the rate increase,” and that an insurer listing one reason when there are three has to list all three. The law spells out what counts: your own claims history, policy changes like a new car or a new driver in the house, anticipated losses in your rating territory, and higher claim costs such as repairs and medical bills.
Second, the reach is wider than auto. Subsection (a) covers private passenger auto, motorcycles, motorhomes, and policies on residential property of four units or fewer. The request-an-explanation piece in subsection (b) goes further: commercial vehicles, condo master policies, businessowners policies, even your umbrella policy, because an umbrella covers a vehicle. Renters policies are out. So is general liability. Neither one covers the building.
One clause is funny. Section 2356(d) says an insurer that lowers your auto premium because of this year’s budget reforms has to notify you and state that the cut is due to the budget reforms. Albany wrote its own credit line into the statute.
Here’s what changes for you. For years, “why did my bill go up” got answered with “rates went up.” That’s not an argument you can have. “Anticipated losses in your territory rose, and you added a driver in March” is. Once a factor is named in writing, you can check whether it’s actually true, and you can carry it to a competitor and ask what they’d charge on the same facts.
Do this. If your renewal lands after August 24 and it’s up at all, look for the notice on the bill. If it jumped more than 10% and no explanation is attached, that’s a compliance failure, and DFS says it will monitor this through market conduct exams and data collection. If it’s up 10% or less, send the written request. The 20-day clock starts when you send it. Then pull three quotes on identical coverage and identical deductibles while you wait, because an explanation and a better price are two different things. Our auto insurance rankings and the insurance estimator are a place to start.
One caveat, so nobody reads this as more than it is. An explanation is not a refund, and nothing in Section 2356 caps what your carrier can charge you. The cap comes later. On November 27, insurers lose the ability to push through overall average rate increases of up to 5% without the Superintendent signing off first.
Until then, you get the reason. Make them write it down.
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