Relates to service contracts for accidental damages

Showing the cosponsors who are on Agora, A to Z. The official record may list more.

• Democratic2

Shown in neutral colors by design; Agora is non-partisan.

◆ The sponsor's argument

Why Jeremy Cooney says this is needed

Primary service contract coverage offers benefits comparable to a manufacturer's limited warranty (i.e. coverage for defects in materials and workmanship or wear and tear). Service contract coverage is supple- mental to a manufacturer's warranty. To avoid unintentionally selling duplicative coverage, primary service contract coverage may not begin until the manufacturer's warranty expires. Service contracts often also provide protection against power surges and accidental damage from handling, but manufacturers' warranties usually do not provide such coverage. Currently, the NYS Department of Financial Services interprets Insurance Law § 7902(k) to state that coverage for power surges and accidental damage from handling is only permissible as incidental coverage and therefore, it must share the primary coverage's term length (effective and expiration dates). Since a manufacturer's warranty does not provide protection against power surges and accidental damage from handling, and since a service contract's protection against these perils may not begin until the manufacturer's warranty expires, consumers are often left exposed and without coverage against these perils during the term of the manufacturer's warranty. This bill amends the Insurance Law to clarify that coverage for power surges and accidental damage from handling are not incidental coverage, and such coverage may be offered commencing on the date of purchase of a covered device and may run concurrently with the manufacturer's warran- ty. This change will provide substantial protection to consumers who might otherwise end up paying the full replacement cost for a covered device due to a power surge or accidental damage from handling during the term of the manufacturer's warranty.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.