ALBANY, N.Y., February 2 – A bill allowing auto insurers to waive the requirement to inspect a motor vehicle prior to issuing a policy under certain conditions was introduced by State Senator William J. Larkin, Jr. (R/C-Orange).

Under current law, all motor vehicles must be inspected prior to being covered under an auto insurance policy. The new bill would allow insurers to waive the prior inspection if they have filed an alternative plan to ensure that the vehicles have not already sustained physical damage.

The prior inspection law was first enacted almost a quarter century ago to address problems of fraudulent damages to motor vehicles that were covered after the accident had been sustained, said Larkin. Since 1984, mandatory equipment can be verified by standardized Vehicle Identification Numbers (VIN) adopted by the auto industry in the 1980s. Fraudulent policies purchased after an accident has taken place can easily be identified through todays new computer technology that pinpoints where and when a call was made, and when a vehicle has been in an accident or repaired.

Larkin continued, While some may still attempt to purchase policies for phantom vehicles, todays modern Special Investigation Units (SIUs) are far better equipped to identify such issues than their counterparts in the 1970s.

Furthermore, Larkin said that the magnitude of this aspect of auto insurance fraud is not large enough to warrant the cost and unintended consequences of the existing law. The current regulation is complex and expensive for insurers to comply with, which drives up the overall cost for all auto insurance in New York.

The intent of the bill, according to Larkin, is to craft a one size fits all solution to reform this requirement that all vehicles must be physically inspected. It allows each insurer to either comply with the existing physical inspection laws, or, if it wants to, to develop its own plan of operation to ensure that it does not cover autos after a physical damage claim has been sustained. For example, an insurer may require physical inspections for autos that are valued over a certain monetary threshold or rely more on new technologies that can identify those vehicles that have already sustained physical damages.